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Business

VCs rake in cash while startups starve

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Opening sequence

Business

VCs rake in cash while startups starve

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COMING UP:VCs rake in cash while startups starve

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00:00:02
>> It's raining cash on some big name venture capitalists in Silicon Valley, but many startups are not seeing much of the windfall. Reuters reporter Heather Somerville.>> Venture capital firms raised $13 billion in the first quarter of this year. That's a huge amount of money. It is the highest amount in a decade, and it's about the third highest since the dot-com boom in 2000.
00:00:26
And it's actually not really something to celebrate that there's so much money, but it's a symptom of big challenges happening in the startup community.>> Part of the challenge, the extraordinary growth of so called unicorns like Uber and Air Bnb now valued at tens of billions of dollars that has left investors without a clear exit plan.
00:00:48
That's because Wall Street has lost its appetite for initial public offerings from money losing companies. No venture back tech startup has IPO'd this year, the few that did last year have been slipping downward and venture firms are bracing for the downturn and putting aside money for companies they've already invested in.
00:01:08
Over at Accel Partners, another notable firm, they've raised a $2 billion fund recently. Just two years after raising their last funds, and they have only depleted a small amount of that prior fund. What that means is they're raising this money to sit on it, to kinda squirrel away this money for a rainy day.
00:01:29
>> So a tough time for startups that may just get worse.