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The Growth of Venture Backed Startups

2020 was a fantastic year for venture backed startups, despite the pandemic and

lockdown. In 2021, venture-backed startups continued to see growth. If this is any indicator,

2022 should hold even more growth opportunities. If you’re unfamiliar, venture-backed startups

are startups that receive venture capital funding. This means they’ve proved to investors that

they are promising enough to invest in and profit off of.


With startups rising in popularity for investors, there were over 10,800 startups across

the US receiving venture funding in 2020. Venture backed startups were also home to around

2.5 million US employees throughout the year. Continuing into 2021, records continued to be

broken. So, let’s look at some numbers and see how venture backed startups have grown.


Growth in 2020


The venture backed startup world hit quite a few records in 2020. Over $164 billion in

funding was dispersed among over 10,800 companies in the US.This is the third year in a row

that over $130 billion has been invested, and it’s expected to continue growing.


The overall median fund size was 69% higher than it was in 2019 at a whopping $75

million. Investors raised $74.5 billion to disperse among startups with promise. Venture startups

popped up all over the country in 2020, and there is at least one in every state. Funds in 35

states and Washington DC also held their final closes in 2020. By the end of 2020, venture-

backed startups were home to around 2.5 million US employees, as well.


Growth in 2021


In 2021, new records continued to be made in venture-backed startup growth. In the

beginning of the year, over $288 billion had been invested in venture-backed startups all over

the globe. That’s over $100 billion from the 2020 numbers. Venture capital fundraising saw an

all-time high of $100 billion. 2021 also saw the highest number of startups receiving venture

capital for the first time in over $23.8 billion over 4,000 investments.


The reason these numbers are so high is because the first quarter earnings of tech

stocks greatly increased since the beginning of the pandemic. Investors had more money to

play with, and companies could hire more people. The ability for private investors to put more

into startups allowed them to stay private and generate more revenue.


Growth in 2022


Venture-backed startups saw consistent growth the last two years despite a global

pandemic. This positive growth is expected to continue into 2022. With startups offering millions

of jobs, they have played a part in the economic recovery from the pandemic, and should

continue to do so.


2022 is as good of a time as ever to get into the venture-backed startup ecosystem.

Whether you are an investor, someone with an idea for a company or looking for a job now is

the time to jump in on this trend.


Resources:

https://nvca.org/pressreleases/record-year-for-u-s-venture-capital-industry-despite-pandemic-and-economic-downturn/

https://news.crunchbase.com/news/global-vc-funding-h1-2021-monthly-recap/

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