Venture capital companies will use cash to provide large amounts of capital for startups in 2021.Now is the hard part

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June 2021, Ralf Wenzel founded the grocery delivery startup JOKR to meet the needs of millions of people who find the convenience of online shopping.A month later, this startup raised $170 million The establishment of “a new Amazon” starts with the delivery of groceries in nine cities.By December, JOkr proposed another $260 million, Valued at US$1.2 billion. Technology start-ups should have moved fast, but this is a new speed: JOkr has changed from a shining spot in the eyes of the founder to a hot unicorn in just six months.

The same goes for hot startups in 2021. The seemingly huge or even record-breaking investment last year pales in comparison with the 2021 transaction. Venture capital funds hit a record high, with global investment in startups totaling US$628 billion in 2021, according to data from Pitchbook. This is almost twice the total number set in history last year. This capital spillover has led to jaw-dropping valuations, fierce trading competition, and the enthusiasm of investors hoping to enter the world’s next great company.

Startups are really more valuable in 2021, or are we at the peak? Unicorn Bubble? “I do think we are in the midst of an entrepreneurial boom,” said Micah Rosenbloom, a partner at Founder Collective. He said that people who work at rocket startups such as Airbnb or Uber are now starting their own companies and bringing in entrepreneurial acumen that the early founders did not have. The idea of ​​defining technology for the next ten years is also exciting-no only Grocery delivery But the future of cryptocurrency and NFT, banking and biotechnology. Many of these ideas are so new that Rosenbloom says it is difficult to understand their true value. “Is it the future of casinos or technology? Everyone is trying to figure this out.”

Of course, venture capital is an optimistic species. They have cut huge checks this year, betting that at least some of them will be rewarded. Hustle Fund general partner Eric Bahn (Eric Bahn) stated that the founders of 2021 must “prove less to raise huge sums of money at huge valuations”. This year’s deal size has surged; according to Crunchbase data, the average round A financing is now $23.6 million, compared with $8.8 million five years ago. Transactions happen faster. NFT music startup Royal raises amazing funding US$55 million in Series A financing In November, only three months after raising $18 million in the seed round.

One facilitating factor is the arrival of new investors. Companies on Sand Hill Road now have to compete with hedge funds, private equity investors and other “non-traditional” players. These investors used to stay away from highly speculative technology startups.Now, they are not enough: New York hedge fund Tiger Global becomes one of the top start-up investors in 2021, surpassing venture capital firms in both areas Size and speed Its transaction.

Rosenbloom said that this competition “accelerated everyone’s progress.” “If you meet a great founder who already has two investment intents and they need to make a decision on Friday, then you must either play that game or not.” In the past, venture capital may take weeks , Months or even years to build relationships with the founders, and then to support their startups. By 2021, this timeline will usually be shortened to a week or less-this is an urgent window to try to understand the founder, evaluate the potential of the startup, and complete due diligence.



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