The last couple years in particular really changed the venture capital game. Higher deal volumes, easier accessibility to venture capital and shorter roads to finding an early-stage company gem to invest in. With 2014 and 2015 being such game changers, we thought it appropriate to roll out a short list of venture capital predictions for the latter of 2016.
1. Rising Deal Volume
In 2014 and 2015, the startup realm saw a very high volume of deals. Expect this trend to continue into 2016, with an increase in deal volume. However, despite a probable increase, the total dollars invested is expected to remain the same. This is by virtue a fewer companies needing late-stage (larger) investments and more early-stage companies needing smaller investments.
2. Crowdfunding Boom
Big investor interest and government legislation have rolled out the red carpet for crowdfunding, which is likely to facilitate a big jump in crowdfunded financings in Canada this year. As point number one alluded to, there is an expected rise in early-stage company growth and a big reason for that is the new found legitimacy and accessibility to crowdfunding.
3. More Attention From the U.S.
It’s already happening. The weak Canadian dollar is bringing big attention and activity from U.S. venture investors. With the Canadian dollar expecting to struggle, this trend is likely to rise pretty exponentially, especially in the Series B stage of investment. Will the exchange rate affect the startup community in other ways? There are benefits to a lower Canadian dollar for companies that have U.S. dollar revenues and Canadian employees.
4. Bigger Deals
Expect to see more companies successfully raising north of $150 Million in venture capital funds in 2016 than we did last year. This expectation goes hand-in-hand with the massive rise in augmented reality and touchscreen technology companies.