What's the venture capital outlook for 2013?

Those entrepreneurs seeking venture capital investment in the months ahead may have a few struggles ahead of them, as the market remains uncertain and debt levels, unemployment and unease plague many markets across the world.

Investment up overall
2012 seemed to mark something of a comeback for the industry. Numbers were up, although they weren't as high as those seen in previous years. Estimates revealed U.S. venture capital firms raised $20.6 billion in 2012, giving it a 10 percent edge over 2011, according to data gathered by Thomson Reuters and the National Venture Capital Association (NVCA).

Fourth quarter slowdown
While the increase may appear significant, data indicates the during the fourth quarter fundraising experienced a large downturn. Firms raised $3.3 billion during this period, a 35 percent decrease from the numbers seen in the third quarter.

"The venture capital fundraising environment has settled into a 'new normal' which is characterized by a barbell structure of larger funds which are stage and industry agnostic on one end, and smaller, early stage, industry or region specific funds on the other," said Mark Heesen, president of NVCA. "It is on these two ends of the spectrum where capital is concentrating and successful firms are raising follow-on funds. Simultaneously, new funds continue to enter the asset class, almost exclusively at the smaller end of the spectrum. This structure, coupled with increasingly discerning limited partners, has kept the overall size of the venture industry below $25 billion each year since 2009, a size that many believe to be optimal for successful investing and maximizing returns."

Growth coming in 2013?
The slowdown in the fourth quarter of 2012 and speculation that firms are concentrating on certain industries may dishearten those seeking business financing in the new year, whether to they're looking to launch their business or implement growth plans. However, there are options for those firms that are struggling to obtain investments in their companies.

Those entrepreneurs unable to obtain funds from lenders such as big banks and traditional venture capitalists may need to think outside the box and look to small and mid-sized banks to increase their chances of receiving approval for such an investment. Working with such bodies and establishing strong relationships with them can work to a company's benefit in the long run, as they are often able to provide more flexible banking options for their clients.

Content presented by Bridge Bank, offering flexible, customized solutions for entrepreneurs.

Getting Started

Find your ideal banker:

Featured Insights

Every time another high-profile company like Target falls victim to fraud, both consumers and businesses scramble to...

Investment volume registers above historical quarterly average ($3.8B) at $7.1 billion. The Silicon Valley continues...

The National Federation of Independent Business released its Small Business Optimism Index for July. Sentiment among...

Inc. magazine spoke to Morgen Newman, who...

Boudin Bakery is one of the oldest businesses in San Francisco, having started in 1849 as the originator of San...

Early indicators show entrepreneurship is growing in the U.S., according to USA Today. Banks are easing credit...

Employment - Men still lag behind women. Overall, men have 699,000 fewer jobs now than they did in December 2007,...

Companies that only do three or four international sales a month are often not aware of the various payment...

Recent News

09/03/14
San Jose, CA – September 3, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
BusinessWire
07/28/14
NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (“KBRA”) has assigned senior...
07/24/14
San Jose, CA – July 24, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
07/22/14
Conference Call and Webcast Scheduled for Tuesday, July 22, 2014 at 5:00 p.m....
San Jose Mercury News
06/26/14
The award is a donation from Bridge Bank and Heritage Bank. Mr. Science makes a...
06/09/14
San Jose, CA – June 9, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
06/05/14
San Jose, CA – June 5, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
06/03/14
San Jose, CA – June 3, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
Orange County Business Journal, Jane Yu
05/28/14
San Jose-based Bridge Capital Holdings has pegged Costa Mesa as a key location for...

Twitter

Featured Insights

Featured Insight

Every time another high-profile company like Target falls victim to fraud, both consumers and businesses scramble to...

Featured Insight

Investment volume registers above historical quarterly average ($3.8B) at $7.1 billion. The Silicon Valley continues...

Featured Insight

Boudin Bakery is one of the oldest businesses in San Francisco, having started in 1849 as the originator of San...

Recent News

The National Federation of Independent Business released its Small Business Optimism Index for July. Sentiment among...

Twitter