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Venture Capital Expected to Surge in 2011 as Startup Scene Expands
Published on Dec 29, 2010
Read our article, 'Venture Capital Expected to Surge in 2011 as Startup Scene Expands' at 'Time to Start Up,' the small business blog by BizFilings.
Venture capital is often considered a funding option only at a significantly developed stage - above angel investment and beyond initial bank loans or personal financing. Since the recession began, VC funding has declined substantially, despite a boom in a number of highly regarded tech and web startups.
In fact, the total amount of money raised by U.S. VC firms dropped year-over-year for 2008 and 2009, according to a statement by Mark Heesen, president of the National Venture Capital Association, to Reuters. And that number is expected to drop for 2010 as well.
However, improving market conditions, as well as a surge in the startup scenes of California and New York City, may contribute to an upswing in VC funding over the next few years. There is also the much-anticipated initial public offerings of companies such as Facebook and Groupon that is expected to occur sometime in the next two years.
Other major venture capitalists such as Merus Capital of Palo Alto, California, are upping their investment funds to meet the anticipated demand. Merus, founded by a former Google mergers and acquisitions executive, is now preparing to raise a new $100 million fund for tech startups and later-stage development companies starting next year.
For entrepreneurs forming a company in one of these startups hubs, it may be a good time to begin floating around ideas for your next round of investing.