2014 US Venture Capital Year in Review published by CB Insights reports a big year for venture in the US – the highest since 2000. Most of the money went to tech companies. So far so good. However, 2014 actually saw the lowest level of VC involvement on a dollars basis with 25% of funding ($11.1B/$44.5B) of tech funding coming from deals not involving VCs.
This finding is sharply illustrated when the data is evaluated on a deals basis (see Figure below). Of the 5859 tech investment deals in the US last year, VC investors participated in only 49% – or in just under 1 of every 2 deals. This is down sharply from 2010, which saw 61% of all tech deals involving a VC.
The rise of angel investors, larger institutional players, and non-traditional tech investors is one key driver of this downward trend.
Yet, there may be another underlying factor. There are those that are sounding a tech bubble alarm. Perhaps VCs are the wise ones?