Written By: Marc Halpin
“California presents to people a new model for the American dream-one where the emphasis is on the ability to take risks, the willingness to bet on the future.” – Samuel Brannan commenting on the California Gold Rush – 1848.
Ok, I’m really trying not to be overly dramatic here but come on, this venture funding thing is getting out of hand! At this point, I am certain we are in the middle of a modern-day gold rush. The data just came out for 2021 and it’s incredible.
To give you some perspective, here’s U.S. venture capital by the numbers over the last five years.
Year Deployed Deal Count
2017: $88.4B (11,109)
2018: $144.2B (11,606)
2019: $144.5B (12,490)
2020: $166.6B (12,173)
2021: $329.6B (17,054)
Just to add a little fuel to the fire, here’s the headline from PitchBook commenting on the 2017 number in hindsight – “A record setting year: 2017 VC Activity in 3 charts”.
We’ve grown 4x that volume in just 5 years. 2021 was simply an incredible year to raise capital. It was, without doubt, the best time to raise money in the history of the 50-year-old venture capital industry.
I know what you’re thinking, “That’s all well and good but that was last year, I’m looking to raise in the next 6 months. What about this year, what about 2022?”
Well, I’ve got three more pieces of data for you that suggest that the future is bright!
- A record number of micro funds (less than $50M) were raised in 2021 focused on Seed investing. Raising a $2M round?.. .get excited!
- VC funding (in other words, the cash VC’s raised for their own funds) in 2021 eclipsed $100B for the first time in history. To be exact $128.3B, shattering previous records. If a fund raises it, they have to deploy it in 2022 and beyond.
- DocSend just reported that VC activity for the first 18 days of 2022 was up 61% on 2021.
Now, in terms of a reality check you still need to be a great founder, you’ll still need to be exploding in terms of growth, you still need a big TAM, your LTV:CAC ratio needs to be the right way up and yes, your go to market plan has to be nailed but this is a great time to be digging for gold!
I bet back in the late 1840s there were three types of people:
- those who made things happen
- those who watched things happen and
- those who wondered what happened.
Go ahead and make 2022 happen. This year, “Have the willingness to bet on the future.”
Kerosene Ventures – Helping Great Founders Raise Capital