There is a lot of discussion these days about startup funding, whether there is a bubble or whether a crash is forthcoming.To get more perspective on the issue, we spoke with Eric Jackson, co-founder and CEO of CapLinked, an online platform for investors in private companies. Even though it’s just one source of data, CapLinked’s growing platform can provide a good overview of the startup funding landscape.
Here’s what we learned:
- Internet deals were up 30% Q/Q on CapLinked, which suggests strong activity, though of course one platform may not be representative of the sector. “People are definitely very active when it comes to looking for money in the sector,” Jackson told us.
- Internet deal size remained constant Q/Q however, at $1.2 million. (This is money invested, not valuation.) Last time we checked in with Jackson, deal size was growing.
- Internet deal size is very small compared to average deal size–$1.2 million vs. $23 million for transportation and $49 million for energy.
While again cautioning that it’s just one source of data, this quantitative information dovetails with what we’ve heard from industry insiders, namely that early-stage startup activity is still brisk, but it’s not growing at the fevered pace it was recently anymore.
It’s also worth noting how small internet deals are relative to the rest of the economy. Another testament to how incredibly capital-efficient internet startups are, as exemplified by Instagram (see chart above).
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