Emerging Venture Capital Trends
Many start-up companies have benefited immensely from the existence of venture capital. Such firms usually exhibit the potential to grow yet they cannot raise capital. However, thanks to venture capital, these companies can get themselves off the ground. Most entrepreneurs who obtain venture capital use it for various purposes. For instance, they plough it into projects like research development or product innovation.
As is customary with most industries, the venture capital industry has witnessed a raft of transformations. The sector has witnessed wide-ranging changes since 2008. Four years ago, it had to bear the brunt of the economic meltdown that affected world markets. It gained its luster in 2011 when it registered a growth of 22% in investments. Some of the trends that have cropped up since then include:
1. Adoption of SaaS (Software as a Service)
Many venture capitalists have warmed up to the idea of SaaS to enhance their services. This technology allows people to obtain software from the servers of software vendors. All they have to do is form an account on these sites. the popularity among venture capitalists is because it presents a viable investment opportunity.
2. Adoption of education technology
The education sector will form an interesting investment area for many venture capitalists. The main focus will be accessing high school and college students. Many startups centering on the improvement of educational standards outside the class will arise. This trend will rear itself through startups that specialize in services like tutorship, webinars, mentorship and test preps. This scenario presents mouth-watering prospects for venture capitalists.
3. The rise of collaborative consumption
Collaborative consumption has also established itself as one of the leading trends of venture capital. This has been evident from the rampant renting and swapping that has mostly relied on crowdsourcing. This has resulted in the creation of entrepreneurial and creative projects. Experts expect most venture capitals to offer safety-oriented services. This is in lieu of the need to net in other new sectors.
4. Warm reception of information technology
Companies that specialize in information technology services will find themselves in the good books of venture capital firms. This sector has made it possible for people to collect and store electronic in appropriate ways. Venture capitalists view a partnership with information technology companies. This is because of the widespread demand for efficient ways of storing large swathes of data.
5. Increased popularity of social mobile technology
In recent times, the social media have proved to be a financially rewarding venture. The target audience is widespread; they include millions of owners of smartphones and android cell phones. Companies that can harness this media will benefit immensely from venture capital.
Van Jacobs recommends Crescent Point Venture Capital and Crescent Point David Hand for more news on venture capital and private equity in Asia.