Top 10 Trends in Venture Capital for 2016
6. Investors will Laud Smaller Funds
The increasing corporate presence and record startup valuations are diminishing the market opportunity for a big catch. This in result has given a much needed space to the smaller market which will help shape the curves of the venture landscape in 2016. For example, in a big shift from the pre-2000 era—the largest ten funds grabbed the lion's share of returns. But today's more complex venture environment is more agile, where smaller funds are posting top returns.
7. Diversity is the Need of the Hour in Investment Teams
Another significant wave to impact the capital canyons is the increasing notice—how much diversity on the investment team drives exceptional returns.
As said by the venture capital icon Sir Michael Moritz, “Sequoia continues to fail to find any significant senior female talent. This is indicative of their relatively impoverished network, by global opportunity standards.” Co-incidentally Sequoia is failing; as a result other funds have found shelter amidst financial performance opportunities.
8. Gender Diversity will be Associated with Top Performance
The year 2015 witnessed a top performance of early stage venture partnership, releasing the results of ten years of investing in 600 early stage founders. The highlight of the year was that female founders outperformed male-only teams financially by 63 percent. As a result one out of five startups seeking venture now have a female co-founder.
9. Avant-garde Professionalization of Early and Seed Stage Funding
The choices for initial capital investment have drastically improved, doesn’t matter if you use a crowd sourcing platform, an angel investor, or an early-stage VC. The year ahead will see acceleration in access to early stage ammunition.
10. Many among the new entrepreneurs will be minorities
According to Kaufman, in 2015, 41 percent of new entrepreneurs were non-white, and in 2016, the majority of entrepreneurs will be minorities.
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