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U.S. VC valuations and trends 2014 Annual Report

With the fading of the spring festival celebration in China, one fifths of the world population enters the new year 2014: the year of horse. Standing in the beginning of the year, we’ve seen and read a lot of annual reports on the past years’ VC performance. Although The Economist claims in its article “On top of the world again” that “the venture-capital industry may be shrinking, but in 2014 America’s innovation engine will prove to be in great shape.” However, innovation is one of the most important factors that drives the venture capital industry, because venture capital industry itself started as an innovation. When “Traitorous Eight” founded Fairchild Semiconductor at Mountain View California, people still don’t know what do venture capitalist doing. But soon, it leads America’s innovation, it changing industries, and until now, as we all know, America is still leading the venture capital industry, and it is not yet ebbing away.

PitchBook’s 2014 Annual Report on U.S. VC Valuations and Trends gives us a much more positive thinking after  the Ewing Marion Kauffman Foundation’s 2012 report which concluded that “venture capital has delivered poor returns for more than a decade”. By saying that “The 4,067 deals and $34.0 billion of capital invested in 2013 are the third highest totals over the last decade, but valuations were the big story last year, as the median pre-money valuation for deals at every stage reached a decade-high”, the Report systematically offers detailed data from Q1 to Q4 throughout recent years.

And following our previous post “This is already the third biggest year in the history of venture capital“, where we quoted Sean Marsh’s point that “extraordinary levels of innovation, a larger consumer market on Internet and mobile than ever before and apparently, robust exit markets that are the lifeblood for successful venture capital investing”, we could see a clear rising in commercial services sector from info-graphics in the Report. Others like software and health care are slowing down, but yet not shrinking.

Moreover, venture capital industry still varies from different regions. Therefore, the Report also provides us a regional view across the United States, stressing out the West.

To read more about exit and fundraising valuation and trends, please see the full report here.

Deal flow by sector

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