Personal musings on the venture capital industry, with a focus on the fundraising and investment stats behind it.
medium.com/@efeng/a-stats…
medium.com/@efeng/a-stats…
Over the past 15 years, there's been a dramatic increase in the number of venture capital funds, with new seed funds being the main driver of that growth. A full 60% of funds raised each year are now seed funds.
With all these new funds, there's been a corresponding spike in investment deals. There’s now an average of 1 venture capital investment being made every hour of every day, 7 days a week, 365 days a year.
While return on dollars has held constant for the industry, the accuracy rate of making successful investments has dropped. An investor 15 years ago was 50% more likely to invest in a company that would have an exit compared to an investor today.
But today's hit companies are much bigger than before. There are now more than 7x the number of billion dollar exits than a decade ago. Unicorn exists were 10% of the volume of exits last year, but generated 60% of the dollars, showing VC returns follow power law distribution.
