by Rhonda Shrader, Associate Director of the Lester Center for Entrepreneurship
“Over half the money invested in the US is in Silicon Valley this year,” according to mentor capitalist Steve Bengston, head of Emerging Company Services at PricewaterhouseCoopers. Bengston presented data and key findings from the MoneyTree report to kick off this year’s first Berkeley Entrepreneur’s Forum. For venture capital globally, the breakdown is roughly 1/3 CA, 1/3 rest of US and 1/3 rest of the world.
After reporting that 44 of the Valley’s 85 Q2 Series A deals were in San Francisco, Bengston received an enthusiastic reception to his challenge, “Let’s start a few companies in Berkeley!”
More MoneyTree factoids included evidence of a widening gap in have and have-not funds, with 60% of LP money concentrated in the 20 largest funds. For the industry as a whole, median fund size is $15M, so stay tuned for the continuing impact. Returns themselves also also becoming more concentrated, with 97% of VC profit coming from 15 companies annually, including companies known unicorns ($1B+ exit).
On a lighter note, Jeff Clavier (SoftTech VC) and Howard Hartenbaum (August Capital) shared their love of the startup parody Silicon Valley. “If you haven’t seen it you should watch it…we know people like that,” said Clavier. “It’s true,” laughed Hartenbaum.
Joking aside, Clavier cautioned entrepreneurs, “Someone giving you seed funding isn’t a validation of your ideas…you’ll still need to do the work with your customers and partners.”
Crowdfunding got some air time, as Josh Breinlinger (Sigma West) confirmed that both types (equity or pre-order) provide valuable data, but worries that regulation could soon impose limitations. Other advice? He urged companies to stay private for as long as possible.
Join us for the next Berkeley Entrepreneurs Forum on Thursday, September 25 with Guy Kawasaki. He’ll be speaking on The Top Ten Mistakes of Entrepreneurs, register here.