News Column

United States : VENTURE capital is an exception as funding source for tech startups

August 8, 2014

Venture capital is the exception as a funding source for tech startups. More new companies fail than succeed, and since 1999 US VC funds have barely broken even.

Those are some of the myth-busting facts that were revealed at the Kauffman Foundation, the leading US entrepreneurship think-tank in the May 2013 issue of the Harvard Business Review (HBR) that focused on entrepreneurship.

The HBR blogs that more than 2 generations ago, the venture capital community, VCs, business angels, incubators, and others, convinced the entrepreneurial world that writing business plans and raising venture capital constituted the twin centerpieces of entrepreneurial endeavour.

But the majority of successful entrepreneurs never take any venture capital.

About 76% of US tech companies acquired had not raised institutional investment (VC/PE -private equity) prior to acquisition.

Venture capital financing may be detrimental to a startup's health. As venture capital investor believe that the fact is that the amount of money startups raise in Series A rounds is inversely correlated with success.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: TendersInfo (India)

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