US tech funding is experiencing a shift, with venture capital (VC) investments now rivalling the 1999 bubble. However, there’s an important difference. In 1999, the VC funding was almost equal to the NASDAQ index, whereas today, VC funding is only around 15% of the NASDAQ index. This suggests that the tech funding landscape is less risky now than it was during the dotcom bubble.
The current tech funding landscape is also different in terms of the types of companies receiving investments. In the late 1990s, most tech investments were in hardware and telecoms. Today, the majority of investments are going into software and related services.
Interestingly, the amount of money invested in tech companies is not the only thing that has changed. The number of companies receiving funding has also increased significantly. This is largely due to the rise of ‘unicorns’ – privately held start-ups valued at over $1 billion.
Despite the similarities in the amount of money being invested, the current tech funding landscape is fundamentally different from the 1999 bubble. The types of companies receiving investments, the proportion of the NASDAQ index, and the number of companies being funded all point to a more diverse and potentially less risky environment.
Go to source article: http://ben-evans.com/benedictevans/2015/6/15/us-tech-funding