The international venture capital market set a record in the third after the first and second quarters. Compared to the third quarter of last year, the amount of total capital invested in Q3 doubled. The average investment size per project has also increased, as about 60 percent of all investments are more than $ 100 million.
In a classic investment process, startups go through a number of investment circles, traversing the entire investment ladder, giant investments however, they push the entire market to the top of the ladder. Globally, this was now the third quarter in which a hundred or more companies once again reached the unicorn mark of $ 1 billion. Based on the above figures, it is easy to see that this has generated a total of $ 100 billion in unsold and perhaps unsaleable goodwill in the market in a single quarter.
however, the explosive pace of the last three quarters has caused an unprecedented tumult. The question is, to what extent can the ladder that represents the totality of capital funds withstand the pressure, are these huge startups able to exit fast enough? Experience to date has shown that, since the existence of unicorns, there has been no period in which more exits have emerged than there are new ones, which is unfortunate for the ecosystem as a whole.
Venture capital funds can pay for themselves in two ways mega. One is when the startup exits, is bought or goes public in Hungarian, and the other is when a next round of investors buys them out. As this next-round investor is also likely to be a venture capital fund, this is irrelevant from an overall ecosystem perspective. There is no significant difference in the number of acquisitions by large corporations over the past three years, which is not surprising as the giants ’budget and human resources for acquisitions will not change in sync with the drastically growing dynamics of the venture capital market. All this means that there is an opportunity left to reduce the pressure, and this is the IPO, or IPO. to enter the public market at a price that was predicted in previous investments or that they think is very realistic.
However, given the positive outlook for venture capital, this is not necessarily a problem, as these firms are expected to grow steadily, have no ceiling and be able to start revenue-maximizing policies once they have gained market share. making pre-determined goodwill increasingly realistic.
The value of a software company is fundamentally impossible to say, partly because data has been more valuable than gold for years, but the existence of data does not mean that it can be effectively used to generate revenue. From a favorable perspective, it can be seen that the dissonance between the stagnant number of IPOs and the growing number of unicorns will have to resolve at some point, so a record number of IPOs should follow.
It is important to note that venture capital does not accidentally include the word risk, as a significant proportion of startups fail. This risk is obviously calculated at the moment of investment, and it is only natural that most of these firms will have a negative return, however, the firms that win will make the overall return for investors positive. Investing in startups has been a fundamentally good business in recent years, and public players are pooling more and more resources in this area, resulting in more capital and more and more investment in the market, so unicorn production not only sets record levels but also grows at an ever-increasing rate.
At some point, the business cycle slows down and returns to something more conservative. Some startups waiting for an opportunity to exit at a higher value may miss the right moment, which may not come back to them on a more conservative level. It would probably be healthier for startups to start the stock market as soon as possible, but as the valuation effect of venture capital is large and raising capital is relatively easy, the serious question is who will choose the harder path?
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