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A comment on Silicon Valley investors build $300B cash pile in startup funding crunch.
I've been pondering this for the last few years when VCs were sitting on huge amounts of capital, but saying "the market is closed".
With the expectation that they deploy the majority of a fund within the first 5 years, let's say a $100m fund would deploy $20m/year.
They've sat out the last 2 years, so they now need to deploy the money they have at a quicker rate.
Will this mean that they
a) push up the valuations of a few companies that all the VCs are chasing (likely in the AI space)
b) spread smaller amounts of funding across more companies.
c) neither, and just continue to not deploy. If you don't deploy the funds, will investors back your next fund?
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I've been pondering this for the last few years when VCs were sitting on huge amounts of capital, but saying "the market is closed".
With the expectation that they deploy the majority of a fund within the first 5 years, let's say a $100m fund would deploy $20m/year.
They've sat out the last 2 years, so they now need to deploy the money they have at a quicker rate.
Will this mean that they
a) push up the valuations of a few companies that all the VCs are chasing (likely in the AI space)
b) spread smaller amounts of funding across more companies.
c) neither, and just continue to not deploy. If you don't deploy the funds, will investors back your next fund?