From Yahoo Finance:
The amount of venture capital startup companies are raising from hedge funds, mutual funds and others beyond the traditional venture capital community is skyrocketing, fueling fears of another tech bubble.While venture capitalists poured $11.3 billion into startups in the first quarter, up only 11% from a year ago, non-traditional funds invested $6.4 billion, a 167% increase, according to a report on Tuesday from CB Insights, which tracks the market. Two years ago, the outsiders contributed less than $1 billion.
Hedge funds and mutual funds have been getting more involved in venture capital investing as fast-growing startups stay private longer. Some also blame the Federal Reserve's low interest rate policy, which may be prompting funds to take more risk to achieve acceptable returns.The flood of hedge fund and mutual fund cash is helping push up the valuations of private companies, a clear trend in the CB Insights data as well as earlier reports on the growing number of so-called unicorns, or venture-backed firms valued at $1 billion and up. There were seven companies that reached the $1-billion-or-higher valuation level in the first quarter, CB Insights reported, after 24 gained that status in all of 2014.While many unicorns are well-known companies like Uber and Pinterest, the newly designated unicorns in the first quarter included much smaller companies such as Nextdoor, a neighborhood-focused social network, the name-that-tune service Shazam and Farfetch.com, a clothing e-commerce site, according to data from Dow Jones VentureSource. More than 80 companies in total are now valued at $1 billion or more, Fortune Magazine reported in January in a story titled "The Age of Unicorns."...MORE
And the accompanying graphic? Approaching perfection:
