Current VC Trends

2020 was one of the best years ever for Venture Capital with many companies getting record exits through SPAC’s and IPOs, or acquisitions. The landscape of low-interest rates and massive amounts of available cash created the perfect environment for many fund-raising startups to thrive. Let’s talk about some of the venture capital trends currently happening.

1. Impact Investing is Here to Stay

Impact investing has emerged as much more than just a fad. Many startup CEOs report having an easier time hiring and raising money if their startup is doing good. Many employees would rather work at a company where they feel they are doing some good for the world and a company eligible for impact investing funds can diversify its available sources of cash. Furthermore, in a world where many are expecting the regulatory environment to tighten its grip on pollution, companies that are already moving to adapt have the potential to come out ahead. This can help them achieve the long-term result they are working for.

2. Filling in the Technological Gaps

Silicon Valley has effectively created entirely new industries over the last several decades and disrupted many more. However, there are still plenty of legacy industries with strong potential for a technological makeover. With the rise of the Internet of Things (IoT) and the leaps of advancement made in robotics, many simple tasks that previously required people to complete increasingly look like targets for new companies. Last, the rise of low-code platforms means that new applications can be built much faster and cheaper than before, and this lowers the barriers to entry.

3. Money Matters

Interestingly, financial startups are in one of the hottest segments of all of startup-land. Many companies are working hard to take advantage of a key paradigm shift of the pandemic: removing in-person interaction. Understanding how to manage money is something that many people struggle with. Hiring expensive money managers and making mistakes are two things that can really put people behind. However, automated technological systems can cut through many of these problems in an efficient manner that can put money back into people’s pockets. One trend is personalized financial products. Examples include custom bank accounts with different properties for teenagers, young adults, parents, and retirees. In a traditional banking structure, it can be a challenge to offer a wide variety of products, but automated platforms can be much nimbler.

Ryan is a Junior studying CS at the University of Notre Dame. His interests include the future of technology, entrepreneurship and venture capital.