5 Predictions of Venture Capital Changes in the Future

5 Predictions of Venture Capital Changes in the Future - To get funding from venture capitals (VC) you have to be aware of any changes from their business trends. Previously, VC were more interested in early startups, considering the potential of high profit. But, sometimes reality turns out differently. Investment in early startups had significant risk. Therefore, relatively VC shifted their interest to “mature” startups that have already been profitable. So, it can widen the opportunity for VC to get stable profits. Other than that, there are five more things drive the change in VC:



Advances in AI Technology 

AI changes how VC qualify potential startups. It will analyze which startups that have high potential of profit and are financially healthy. Also, the fundraising process will be more efficient and more transparent. To respond to this change, startups can utilize AI in their internal process to accelerate their business. Another good point, VC will see it as a great improvement.



Business Sector Diversification 

As we know, VC mainly focus on technology companies such as software, biotechnology, and fintech. But, in the future, the focus will be broader to get more profit. They will look at businesses on renewable energy, AI, and manufacturing. Startups should be aware of this change by conducting intense market research to discover what business sectors are currently growing up and potentially noticed by investors.



Social Impact and ESG Considerations

Startups that consider social impact and ESG principles will have bigger opportunities to get funding as the environment issues are also increasing globally. So, startups that can prove their products or services are environmentally friendly will be “spotlight”.


Global Expansion and Localization 

VC used to prioritize their investment in big startups in Silicon Valley, USA. But for now and also in the future, VC are also interested in prioritizing their investment to other countries with great potential markets, such as Asia, Europe, Latin America, and Africa. They will be so open to many local startups to scale their business, even on a global level.


Emergence of Alternative Funding Models 

Startup investment is not only focused on among VC. Now, there are many alternative funding sources, such as crowdfunding platforms, angel investor networks, and digital fundraising methods such as initial coin offerings (ICO). 


The Future of Venture Capital

The future of VC will bring challenges and opportunities for startups. You need to adapt immediately by maintaining your business growth, strengthen your team, and do market research frequently. 


In addition, startups must also open for opportunities from other funding sources so that they do not depend on VC!*