Venture Capital Funding Slows

Washington Post writer Abha Bhattarai reported recently that, “Venture capital investments in Washington-area companies fell by nearly one-half, to $136.25 million, during the fourth quarter, down from a peak of $260.45 million a year earlier, according to recently released data from the National Venture Capital Association.

The drop in funding — to the lowest level in four years — mirrors a national trend. Investors pulled back as companies found it harder to go public during the turmoil of the election season and corporate exits became more difficult, lowering expectations for large paydays. Many big-name upstarts saw their valuations lowered.”

The Post article noted that, “‘The Washington region is a good reflection of what’s going on nationally,’ said John Backus, managing partner of Reston-based New Atlantic Ventures and an NVCA board member. ‘If you look at the big picture, venture investments peaked in 2014 and 2015, and now it’s coming back down.’

Nationally, fourth-quarter venture capital deals tumbled 25 percent, to $12.71 billion, from $16.89 billion a year earlier. There were a total of 1,744 deals during the quarter, down from 2,376 for the same period in 2015, according to PitchBook, a research company that provided the data for the association’s report.”

“Nationally, 39 venture-backed firms had initial public offerings in 2016, down from 77 a year earlier,” the Post article said.

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