Funding for tech start-up hits records as giant dwarf venture capital funds

Major fund management firms extended their dominance in Silicon Valley in the last quarter, crowding out venture capitalists in a once-niche firm and setting 2021 on pace to nearly double last year’s record for start-up funding.

Hedge funds, mutual funds, pensions, sovereign groups and other so-called non-traditional venture capitalists were more active in the second quarter than in any previous period, according to the research firm PitchBook Data Inc. These companies participated in 42% of the seed funding. transactions, and those transactions accounted for more than three-quarters of invested capital, according to Pitchbook.

Investments in U.S. startups for the first half of 2021 reached $ 150 billion, eclipsing annual funding each year before 2020, according to a PitchBook report.

Large asset companies have huge pools of capital, grow quickly, and are less likely to seek board seats or participate in company decisions, often making them more attractive to founders. according to interviews with investors and startup executives. The result was a breakneck pace of negotiation.

“It’s like speed dating but more extreme,” said Peter Fishman, a longtime Silicon Valley tech professional who co-founded data automation start-up Mozart Data Inc last year. .