One Data Point Suggests Startup Funding Is Still Hot

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A lot of people are expecting a crash in funding for early stage startups, believing that current early-stage valuations are too high, there’s a lot of dumb money around, and the party can’t last.Is that true? To find out, we spoke with Eric Jackson, co-founder and CEO of CapLinked, an online platform for investors in private companies. We figured that from that vantage point Jackson would have some data on early-stage funding activity.

With the caveat that this is just one data source and the sample might not be representative (CapLinked is still a young, albeit fast-growing, service), here’s what we learned:

  • The pace of internet-related investing hasn’t slowed at all. Jackson says he saw a slight dip in August, which he thought was related both to the summer and to the stock-market crash that happened around S&P’s downgrade of the US debt, but since then the pace of investing has grown back and there’s no evidence of a slowdown. 
  • Interestingly, the average size of internet-related deals is growing. This suggests that valuations and funding amounts are still on the rise. 

As we said, it’s one data point, but an encouraging one.

MORE ON STARTUPS: Why Instagram Is The Future Of Startups →

This note was published as part of BI Research, a new industry intelligence service from Business Insider. The service is currently in beta and is free. To learn more and sign up, please click here.

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