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VC Investment for Q1-3 2018 Already Surpasses 2017 Total

Oct 24, 2018

A Quarterly Wink and a Glance at Venture Capital

U.S. venture capital activity remains hot. How hot? Q3 2018 saw $27.9B of venture capital investment, which was slightly more than the $27.6B invested in Q2. In fact, venture capital investment for the first nine of months of 2018 totaling $84B has already exceeded all of 2017’s total of $82B.

Larger Deals Continue to Lead the Market

Larger deals continue to be the headline. Q3 2018 saw 12 deals of $300M or more. During Q3 several leading brands such as Peloton, Uber, Zoox and Lime continued to raise large private rounds and delayed IPOs. Peloton and Uber each raised in excess of $500M in Q3. Even though dollars invested were up in Q3, the number of completed deals declined from 2,349 in Q2 to 1,937 in Q3. The urban mobility and autonomous vehicle sectors continue to see the larger-dollar deals.

Several High-Profile Unicorns to Go Public in 2019?

After years of relying on capital from private sources and remaining on the stock market sidelines, many highly valued unicorns are now planning to go public over the next 12 months. Among those companies are Uber, Lyft, Palantir, Airbnb and Pinterest, just to name a few. Private capital is certainly still available for them in large amounts, but these companies are now drawn to the public markets by record stock prices and a potentially liquid market for their shares. If these unicorns do go public next year, 2019 could the best year in terms of IPO dollars raised since the height of the highly publicized dot-com boom in 2000.

The Rest of the Way in 2018

With significant amounts of venture capital still sitting on the sidelines, the frothy venture capital market should continue through Q4. With $84B in venture capital already invested in the first nine months of 2018, it looks like a slam dunk that the market will exceed $100B in VC investment this year. Perhaps some of the large VC rounds will slow down next year due to a robust IPO market, but no one really knows for sure. Stay tuned: 2019 could be very interesting year for venture capital.

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Alan Wink

Mr. Wink assists clients with capital budgeting, capital structuring and capital sourcing. He has worked with many tech and life science companies on developing the appropriate capital structure for their position in the business life cycle.

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