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On today’s Business Beat, Jeff discusses venture capital investment, which was at a record high throughout the first half of 2021 and is experiencing greater gains through all stages in North America, according to Crunchbase.
Tune in to the Business Beat, below, to learn more about this surge in venture capital investment and what it means for startups:
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Good morning, Paul!
It’s the start of a new week! Lots of dreams of business success being chased hard by deserving entrepreneurs, and to get this week started off on a positive note, we’ve got news about the state of startup funding, the lifeblood of fast growth companies. And here it is: globally, venture capital investment is up 95% year over year to at least $288 billion through the first half of 2021. Even better, venture investment specifically in North America is experiencing even greater gains and across the spectrum of stages as well, from the earliest seed rounds to the later growth rounds, all of this according to news as reported in Crunchbase.
April of 2021 was the second highest month on record for investment in private companies, according to data from Crunchbase, with VCs sinking more than $48 billion into business ventures. That’s topped only by March 2021, which saw more than $54 billion in venture capital investment. Why the torrid pace of venture investing? Well, the increase in big exits over the last five years leads to more investors wanting to play in the space, and so we have more capital flowing into investment funds, targeting private company investment.
And when there’s lots of cash chasing deals, simply put, when you have relatively more cash chasing deals, you’re going to have more deals getting done, as fund managers seek opportunities to place invested capital in their funds.
Who’s getting the funding? Well, the bulk of the deals are getting done in software, e-commerce, digital healthcare and fintech companies. Here’s the bottom line: without readily available capital to fuel fast growth startup companies, you simply don’t have fast growth. And if you don’t have fast growth, startups simply don’t have the staying power in many cases to get to the point where they can support themselves on revenue, let alone grow. And the record level of investment available to fast growth startup companies today is just another reason why this post-pandemic era is one of the best ever in the history of our country to start a company. So, get out there, and get your piece of the action.
I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.