Venture capital is booming … for a hundred companies

There was a great post recently by Fred Wilson, who is much smarter about venture capital than I am.

He debunked the idea that the apparent boom in venture capital (total investments were up 60% in 2014) is anything that you should get excited about:

“Round sizes have gone up and burn rates have gone up, but so much of this is limited to a hundred or a couple hundred companies. The rest of the market is more or less where it has been for years. The rich are getting richer. The middle class is stagnant. And the people who can’t raise a round still can’t. Only the top end of the market has really changed over the past five years.”

As I’ve posted in the past, your odds of getting venture capital are about the same as your odds of dating a movie star. It can happen, and don’t count on it. You are far better looking for funding with the real, hidden, investors who do most of the investing in early stage companies.