NVCA 2017 Yearbook: The Go-To Resource on the Venture Ecosystem

by & filed under NVCA Blog, Research.

Maryam Haque

We are pleased to present the 2017 NVCA Yearbook, documenting trends and analysis of venture capital activity in the United States from the past year and capturing historical data and information about venture’s role in fueling entrepreneurship in America.

What is the NVCA Yearbook?

Now in its 20th year, the NVCA Yearbook is an annual publication that provides statistics on the size and impact of the U.S. venture industry, investments into startups, capital raised and managed by venture capital firms, and exit activity. The Yearbook is an indispensable resource for anyone working in venture capital and has long been seen as the benchmark for tracking and analyzing venture capital activity from year-to-year. (more…)

Superpower vs Upstart: The Super Bowl’s Entrepreneurial Ecosystems

by & filed under NVCA Blog, Research, Venture Investment.

Devin Miller

On Sunday night, the New England Patriots clash with the Atlanta Falcons in a Super Bowl matchup that pits two football franchises with wildly different recent histories.  The Patriots come into the game as the most successful, and to some infamous, NFL franchise over the last 16 years.  The coach/quarterback combination of Bill Belichick and Tom Brady has created one of sport’s most impressive modern dynasties, with a combined 7 Super Bowl appearances (including 4 wins so far), 14 division titles, and 214 combined regular season and playoff victories.

The Falcons by comparison have had spikes of success over the last decade and a half, with peaks of 7 playoff appearances over the last 16 seasons, but also significant valleys in 8 seasons without a winning record.  However, this season the Falcons were the second seed in the NFC Conference and had one of the most explosive offenses in NFL history, rivaling the offensive firepower of the 2007 Patriots team that went undefeated in the regular season that year.

This dynamic sets up the Super Bowl as a contest between a perennial heavyweight and a scrappy contender, an empire against a rebellion, or whatever other David vs Goliath metaphor you can think of. (more…)

Reflecting on 2016: Five Takeaways from the Q4 2016 PitchBook-NVCA Venture Monitor

by & filed under NVCA Blog, Research.

Maryam Haque

Earlier this month, we released the Q4 2016 PitchBook-NVCA Venture Monitor, a review of the U.S. venture capital ecosystem’s fourth quarter and year-end trends for 2016.  Between the Presidential inauguration, meetings with the Trump transition team, and various other industry data releases, it has been a busy start to 2017 for NVCA.  So in case you may have missed it, here are some helpful resources related to the report:

  • PDF copy of Venture Monitor (link)
  • Supporting XLS data pack of Venture Monitor (link)
  • View the PPT deck and a copy of the Q4 PitchBook-NVCA Venture Monitor webinar (link) [Note: available only to NVCA members.]

The report unpacks a large number of trends and data points on the venture industry, so we have highlighted five major trends below that caught our eye: (more…)

NVCA-Deloitte Human Capital Survey: A New Approach to Diversity & Inclusion Research

by & filed under Diversity, NVCA Blog, Research, VentureForward.

Jessica Straus & Maryam Haque

We just released our diversity study. Our study is different. We set out to survey all VC firms active in the U.S. to establish a benchmark of the current demographics of the industry and to take a closer look at firms’ talent management practices.

If you’ve spoken with a member of the NVCA staff over the past two years or one of our Board Members, the topic of diversity and inclusion (D&I) in the venture capital industry has likely come up. Since the launch of NVCA’s Diversity Task Force in December 2014, NVCA staff, its Board, and its members have focused on building a more inclusive innovation ecosystem. In our report Building a More Inclusive Entrepreneurial Ecosystem this summer, we outlined many proactive NVCA efforts and industry resources, highlighted a few firms who are leading the pack in terms of diversity initiatives, and referenced third-party data on D&I in VC. (more…)

Ensuring a Vibrant Medical Innovation Ecosystem

by & filed under Healthcare Innovation, NVCA Blog, Venture Investment.

Jeff Farrah

Venture capital’s contribution to the technology and Internet sectors are well understood, with VC partnering with the founders of iconic brands like Facebook, Uber, and Netflix.  What is not as well understood is how venture is tackling the world’s deadliest diseases and afflictions through the patient investment of capital in life science startups.  A prominent example is Genentech, the world’s first biotechnology company, which was founded in 1976 by a venture capitalist and a professor at the University of California, San Francisco.  Today, venture is building on past success to solve our nation’s most pressing health care crises, like lymphoma, multiple myeloma, sickle cell disease, cystic fibrosis, multiple sclerosis, and many others.

Small, venture-backed companies play a critical role in bringing groundbreaking medical innovation to market that diagnoses, treats, or cures previously intractable diseases like cancer and HIV/AIDS.  These fast-growing and hungry new enterprises are responsible for a considerable amount of breakthroughs in life sciences, so much so that drug companies now rely on acquisitions for three-quarters of their drug pipelines rather than develop new products internally.  In many other cases, VC-backed life science startups grow into successful enterprises of their own, with 51 having gone public in 2015.  In fact, life science startups drove two-thirds of all VC-backed IPOs in 2015. (more…)

Correcting The Record On How QSBS Impacts The Entrepreneurial Ecosystem

by & filed under NVCA Blog, Taxes, Venture Investment.

Justin Field

At NVCA we are committed to helping policymakers craft pro-growth policies that help startups continue to drive the U.S. economy and encourage job creation.  So when we see articles that fail to understand how innovation and entrepreneurship work, it is our responsibility to correct the record.  This recent article in Politico makes just this mistake and threatens to undermine public support for an important provision of the tax code that encourages investment in early stage startups.

Let us start with a couple of facts that we should all keep in mind.  Twenty-five years ago, more than 90 percent of global venture capital was invested in U.S. entrepreneurs.  Last year, U.S. startups attracted 54 percent of global venture capital investment as other countries continue to reform their policies to build their ecosystems and compete with our long-held leadership in the space.  In addition, smaller C corporations have been vanishing.  As a result, the total number of U.S. public companies have been reduced by half in only 20 years. (more…)

New Data Provider: Greater Capabilities, Added Benefits

by & filed under NVCA Blog, Research.

Maryam Haque

In case you missed it, we announced exciting news this week – PitchBook is now the official data provider of NVCA!  Everyone on staff at NVCA is excited to begin this new partnership, but this is particularly exciting for me since my day-to-day at NVCA involves being immersed in research and data related to the entrepreneurial ecosystem.  As the national trade body of the venture capital community, NVCA frequently receives inquiries related to data and research from a wide range of stakeholders, including the media, policymakers, academics, entrepreneurs, limited partners, and venture capital firms (both NVCA members and non-members).  In essence, NVCA is recognized as the go-to place for information on the venture industry, and the statistics we release in coordination with our data provider have become the industry standard. (more…)

Growth Equity’s Year Ahead

by & filed under Events, NVCA Blog, Venture Investment.

Brian Rich

As a growth equity investor, Board Member of NVCA, and current Chair of the Growth Equity Member Peer Group, I am focused on advancing the growth equity asset class through education, policy, and investor community engagement. With that in mind, I wanted to provide a brief update of our recent activities. (more…)

VC Research Spotlight: How Do Venture Capitalists Make Decisions?

by & filed under NVCA Blog, Research, Venture Investment.

Maryam Haque

What’s the secret sauce for venture capital investing?  Unfortunately, I don’t have the answer, but it’s not surprising that the topic has piqued the interest of a number of academics.  A recently-released Stanford University Graduate School of Business paper – “How Do Venture Capitalists Make Decisions?” – assesses the VC decision making process to better understand what venture capitalists (VCs) do and why they have been successful.  The study examines eight areas of VC decision making: deal sourcing; investment decisions; valuation; deal structure; post-investment value-added; exits; internal organization of firms; and relationships with limited partners.

About 900 institutional VCs at 681 firms were surveyed (including many NVCA members), and the findings shed light on the complex world of venture investors.  At a high-level, two things stand out: 1) it is no understatement that VCs make lots of critical decisions across multiple levels of management – investments, portfolio companies, firm-level, and LPs; and 2) there isn’t a “one-size-fits-all” approach – VC practices vary across industry, stage, geography, and past success.

Some highlights of the paper’s findings: (more…)