Big money management firms expanded their dominance in Silicon Valley last quarter, displacing venture capitalists in a once-niche business and setting 2021 on track to nearly double last year’s record for startup financing. .
Hedge funds, mutual funds, pensions, sovereign wealth groups and other non-traditional venture investors were more active in the second quarter than in any prior period, according to research firm PitchBook Data Inc. These firms participated in 42% of the initial financing. deals, and those deals accounted for more than three-quarters of the capital invested, according to Pitchbook.
Investment in US startups for the first half of 2021 reached $ 150 billion, dwarfing full-year funding each year before 2020, according to a PitchBook report.
Large asset firms have large amounts of capital, move quickly, and are less likely to apply for board positions or participate in company decisions, often making them more attractive to founders, according to investor interviews and startup executives. The result has been a dizzying pace of negotiation.
“It’s like speed dating but more extreme,” said Peter Fishman, a veteran Silicon Valley tech professional who last year co-founded data automation startup Mozart Data Inc.
Source: WSJ
