Following the acquisition of smaller tech company such as WhatsApp or Oculus, venture capitalists in the valley may become more active in investing. A recent report is showing a sharp jump in Silicon Valley startup investment in the first quarter of 2014. Insiders think it is a good thing for the startup funding ecosystem.
According to a new report from PitchBook Data, in Silicon Valley a total of $5.7 billion of capital was invested in 321 deals in the first quarter of 2014. The monetary value is 66 percent more than that of Q4 2013. The number of deals also went up.
Insiders comment that because companies are getting acquired, VCs have more confidence in investing startups.
“I think they are starting to see a lot of companies get acquired, which has been led by acquisitions like WhatsApp by Facebook for $19 billion dollars,” said Chris Kitze, the CEO Unseen, a tech company that provide secure communications.
Enders Fund CEO Jinsoo Park also told Epoch Times that BashGaming, which makes the game Bingo Bash, recently got sold for a few hundred million dollars. These all increased the confidence of investors.
“That’s a good cycle for the startup funding ecosystem,” Park said.
High performance of the stock market also helped the jump.
“The stock market continues to set new record highs,” said Kitze. “This gives companies the ability to pay with inflated ‘currency’ of their stock, so they can appear to pay more because the price of their stock is high.”
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