High-tech Venture Capital funding dashboard – Q1 2016

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Based on the first quarter of 2016, Los Angeles’ venture capital funding totaled $259.2M and accounted for 3.5% of the total funding in the U.S. While funding has slowed slightly this quarter, the same is happening around the county.

We may be in later stages of the cycle, but there will be no bursting bubble thanks to diversification.

  • Investors are still optimistic, there is plenty of innovation occurring, and tech is expanding into other sectors like textiles, consumer goods, medicine, and entertainment.
  • Although optimistic, VC’s are going to be looking closer at the burn rate of startups. Later stage companies will start to feel more pressure to meet growth expectations and start turning a profit over the next 12 -18 months.
  • Survival of the fittest: Startups in highly saturated sub-clusters like on-demand services and social media will need to differentiate to survive. Despite the traditionally high mortality rate of startups, the spread of tech will help prop the industry when the market starts to cool.
  • VC funding will start to taper this year as IPO and M&A activity has flattened out. With some recent M&A deals closing at prices less than the private valuation, funding will likely start to taper until high-fliers swing to profitability.

High-tech_VCFundingQ1-2016

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For more information contact Devon Parry

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