As start-up companies start to surface more and more, venture capital investments will multiply as well.
Even if venture capital funding for 2015 was marked as the 2nd highest since 1995, racking up $58.8 billion in investments, some states are currently suffering from a decrease in investor confidence, lowering venture capital funds accordingly.
One of the states which encountered a massive boost in fund amounts in 2015 was Maryland. The total amount of $450 million was raked in the last three months of 2015, making that quarter one of the best from the past 15 years in regards to start-up company funding.
This total sum was massively boosted by one of the largest deals made in the US during that period, the investment made by Accel Partners & Co. and Insight Venture Partners towards the funding of Tenable Network Security, based in Columbia. The reports pertaining to this deal mark the total venture capital investment at $250 million. The company in question provides its security services towards hacking and data breaches for Forbes 500 and several government networks.
Odds are fairly high in regards to Tenable Network Security suffering from an exponential growth in the near future. This investor assessment is based on the current need of a higher degree of security towards hacking attempts, as cybercrime is starting to gain prevalence across the US.
On the other hand, Florida encountered a rather grim period in the last quarter of 2015. Although the total amount of capital venture funds gathered in 2015 was marked at $450 million, with over 58 company deals, the anemic fourth quarter brought in only $31 million.
In comparison to 2014, this sum has fallen back to the levels present in 2013. But 2014’s numbers were boosted by one of the biggest venture capital deals in recent memory, Magic Leap’s deal of $560 million. Fortunately for the state, said company is expecting a massive boost for 2016, supposedly raising over $840 million.
Megadeals like the one mentioned before were fairly common in the market of 2015, with around 70 deals surpassing the $100 million mark, in comparison to 2014’s 50 deals. The total amount of venture capital investments was boosted by seed and start-up companies as well, with more than 1,400 businesses entering the venture capital market.
The start-up companies that got the most attention from investors were the ones who displayed intuitive and somewhat disruptive business models and technologies. In regards to the industry side targeted by these companies, the most sought after were the ones that dabbled in retail, education, consumer and financial service industries.
With investors bearing in mind the fact that venture capital funding for 2015 was marked as the 2nd highest since 1995, although it suffered from a fairly anemic fourth quarter, their assessments for 2016 are rather optimistic to say the least. But this will entirely depend on how the global markets will fare in 2016, as well as the general company and consumer behaviors which will change alongside the market.
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