Q3'16 Venture Pulse Report. Deal count stable, dollars down. Corporate involvement is up.

The scene

Hi there,

We just released our 103-page Venture Pulse Report, Q3 2016 with KPMG. The quarterly report highlights the latest trends in venture capital funding globally.

Check out a few highlights scattered below.

Cape fear

The #1 fear of Americans is the corruption of government officials. What?


Mixed results

Deal activity remained stable in Q3 compared to the previous quarter, but remains below the levels seen from Q1’14 to Q3’15. Meanwhile, dollars invested in VC-backed companies slipped to $24.1B, the lowest quarterly funding total since Q3’14. 

After $100M+ checks flowed freely to VC-backed companies through much of 2015, the mega-round trend has settled into a lower range through 2016. There were 34 100M+ mega-rounds in Q3’16, on pace with Q2’16, but less than half the 73 mega-rounds recorded in Q3'15.

The Uber effect

NYC medallion prices are fading faster than my hairline.

Missing unicorns

From a high of 25 new unicorns in Q3’15, 2016 has yet to see a quarter with double-digit new entrants into the unicorn club. Q3’16 saw eight newly minted billion-dollar companies including Compass, Unity Technologies, and OfferUp.

F starups

Check out The Blurb for one of the better rants on startup life. It opens quite strong decrying all the scenesters.

Corporate participation

Corporations have steadily ramped up their private markets activity, as more large players are either establishing CVC arms or investing directly in VC-backed companies. Q3’16 was no exception, with corporates and CVCs participating in 28% of all deals, a 5-quarter high.

Migration pattern

Though the majority of robotics deals went to US-based startups in the last five years, the share of deals going to robotics startups outside the US has been on the rise. Starting at 26% of deals in 2012, deals to non-US startups reached a 5-year high of 43% in 2016 (as of 10/5/2016).

We used the CB Insights database to identify recent deals to startups outside the US.

The Industry Standard

CB Insights data is the most trusted by those in the industry and the media. A few recent hits.

Bloomberg. Leila Abboud (@labboudles) digs into our Venture Pulse Q3 Report, noting that while some VCs are raising money at a fast clip, they are deploying it cautiously.

Vanity Fair. Nick Bilton (@nickbilton) takes a close look at Silicon Valley's recent fascination with reality vs. simulation, noting CB Insights' research on the race to acquire AI companies.

CNET. Dara Kerr (@darakerr) profiles tech-food company Impossible Foods and talks to CB Insights tech analyst Zoe Leavitt about investor interest in next-gen food startups. 

David Schwartz discusses the need to create proprietary tech and refers to CB Insights report on the top reasons startups fail.

Have a great rest of the week. 

I love you.


P.S. Don't miss our webinar on the rise of robots. Sign up here.

The Venture Pulse Report, Q3 2016

Q3 2016 saw a very slight increase in total deals from Q2 2016, but a 14% decline in total quarterly funding. Although deal volume is still quite healthy by pre-2014 standards, this was the lowest quarter of funding since Q3 2014. See the data.
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Robot Planet: Deals to robotics startups begin to proliferate outside the US

The top 4 rounds to robotics startups since January 2015 were raised by China-based startups. See the data.
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The Blurb

A curated mix of articles on private companies, venture capital, emerging industries, and innovation.

The Brexit startup effect. Nic Brisbourne (@brisbourne) talks about the potential negative ramifications if the European Investment Fund (EIF) can no longer fund UK startups following Brexit.
The Equity Kicker

Syndicated. Jeff Bussgang (@bussgang) writes about his experience starting a small angel fund on AngelList and how it compares to Flybridge's traditional investment strategy.

Idea bank. Mahesh Vellanki (@mvellank) puts forward his list of consumer startup ideas he'd most like to see.

Not that cool. Gretchen Deknikker talks to CEOs from an HR tech company, a charity platform, and a legal tech startup about the challenges and benefits of starting an "un-sexy" enterprise software company.

New medicine. Bruce Booth (@LifeSciVC) digs into recent FDA approval data to understand where the biopharmaceutical business is going. 
Life Sci VC

F the startup world. Shem (@shemag8) offers a beatdown to startup culture

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