Venture Capital Market Update H1 2019

We started 2019 with hope for Venture Capital, and, in general, for the innovation economy.

It has been a record in terms of quantum invested but like in the last six quarters the story has not changed, only accelerated the polarisation of our ecosystem.

In the UK we have observed a slowdown of VCs investing and fundraising activity with Early-Stage registering the biggest hit compared to previous years.

We have mega-rounds distorting true market sentiment, as more growth and later-stage capital chasing exceptional companies. Distortions are common especially as we have more capital being raised by funds and also an abundance of new emerging funds.

It is an important signal of something I consider fundamental to the Venture Capital industry, we are lowering our risk tolerance, thus chasing Revenues / EBITDA growth predictability, rather than innovation and technologies which will be valuable 5–10–20 years from now.

Early-stage, first-time founders, are at risk if patient capital is not flown in the regions and major innovation hubs to sustain the potential macro-shocks coming, irrespective of their magnitude.