From peHUB:
Venture Capital Overhang Down A Precipitous 37%
Venture capitalists have been investing more than they raised for six years. This year could be the seventh.
So what has that done to the industry’s stores of dry powder? They are lower, obviously, perhaps more so than many partners realize.
According to PitchBook, venture’s overhang of investable capital has fallen 37% since 2008 to $53.3 billion at the end of last year. That’s roughly an eight-quarter supply at the current pace of investing, should no new cash come into the industry.
“This will reach a breaking point sooner or later, and VCs will either have to curtail their investing or redouble their fundraising efforts,” PitchBook says in its recently release second half fundraising report.
To make matters worse, the research firm calculates that only 18% of the capital is held by funds less than $250 million in size, the majority of funds in the industry and the ones most likely to focus on early stage investing. Not good news for Series A crunch startups....MORE
