Going to seed
The money tap is being screwed down in Silicon Valley with the number of seed-stage financing transactions slipping 40% since their mid-2015 peak. Investment in start-ups is also on the slide, down almost one-quarter over the period.
According to Pitchbook, seed and angel investors completed some 900 deals in the second quarter, down from 1,100 in the same quarter of 2016 (and 1,500 in 2015).
Seed investors look to be migrating to fewer but bigger transactions – the median deal now comes in at $1.6 million, up from $500,000 five years back.
The slowdown could take a toll on much-vaunted disruption.
"The reason why start-ups are disrupting companies in the 21st Century is not because they are smarter,” Steve Blank, adjunct professor at Stanford University, tells Reuters. “It's because they have capital to do so.”