12 Predictions for Venture Capital in 2018by@tracecohen
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1,587 reads

12 Predictions for Venture Capital in 2018

by Trace CohenDecember 26th, 2017
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2017 is over but 2018 is here to keep it going

Well that was an interesting year! So lets wrap it up in style and start making some predictions for what to expect next year and how we can top it because everything needs to go up and to the right.

  1. The bigger seed rounds will continue. As I mentioned in my previous post, micro funds raised were at an all-time high and yet deal volume didn’t increase, just the average round sizes. Along with the mega VC funds who are coming down stream, the seed and series A rounds will continue to grow in size (hard for them to write small checks) as they double down and provide more capital to their investments.
  2. More liquidity through IPOs / M&A. With the stock market at all-time highs, relatively successful tech IPOs in 2017 (Roku, Stitchfix) and hopefully a tax cut that will increase profits and repatriate billions, we should see some increased activity here. Once there is more liquidity, you can bet it will be reinvested — when it rains, it pours. Unfortunately the affects of this will be delayed into 2019 as lockups end. You can see a list of about 60 IPOs from this year to see how much they’ve raised and since they’ve started here.
  3. VR/AR will need more time. This got a lot of hype and has yet to deliver but I dont think major consumer adoption will happen next year. Yes Magic Leap announced their “One” sometime next year but the biggest problem I see is their “premium” price point and lack of content. Even if another major tech company announces their product next year, I think this is more a 2019ish inflection. Maybe the movie Ready Player One (love the books!) can give it a little bit of a sales bump.
  4. eSports will level up. 2017 was a great year of hype for the industry that I feel will finally start to pay off with substantial revenue. Yes there are huge prize purses, sold out stadiums and a league was formed (OWL) but 2018 will drive the big brands into the industry via sponsorships and streaming rights, which means $$$. That’s only if the publishers (Activision Blizzard, RIOT etc) that own it all play nice.
  5. Blockchain/ICO something will finally deliver a product and be disappointing. This isn’t a knock at it but a realistic point of view as it’s an unsexy back-end technology that can change our “internet” fundamentally but doesn’t have any real consumer day-to-day use. I’m only saying this as it’s all the rage right now but as a normal person, we’ll end up using it unknowingly if it all works out seamlessly. Interest in this space will continue to increase even as scams and failures occur — just be careful!
  6. Increased frontier tech investments in all the jargon words. More specifically in robotics, AI, autonomous cars and space, all things that I like to say “have to” happen eventually. Most of the talent/resources will still be locked up at the big tech companies but expect a few notable acqu-hires and a handful of breakout fundings.
  7. BREAKING: Media will be in for another tough year. It was a rough end of year for media with Buzzfeed missing their targets and Mashable being sold significantly below their last valuation and some other publications laying off journalists. Don’t expect many reports of media companies being funded, though a few like Axios and Cheddar may lead the way to show you can build a growth-able brand. Basically Huffpo/Business insider were false positives in the industry and Facebook/Google aren’t done taking all the $. Media will have to start looking for revenue in new places or be forced to consolidate more.

Now time for some crazy and fun predictions:

  1. Apple and/or Microsoft will get in a bidding war for Magic Leap. This will allow Apple to compete with everyone else with a complete phone, watch and headset / haven’t heard much about the HaloLens and didn’t like the demo very much. Or Softbank will just give them another few billion because they will need it.
  2. Politics will try to regulate the big tech companies with no effect. We’ll see which though really tried to fight Net Neutrality and who was just doing it for PR then…
  3. There will be a “tech backlash” verbally but we’re too addicted to social media and it will only get worse before it gets better. Big brands ad $$$ is the major catalyst here so we need to appeal to them if we want any change.
  4. Amazon will announce something with autonomous cars.

And 5 things I want to work on:

  1. Read more books — thank you everyone for the great lists
  2. Delete all the useless/mindless games on my phone that are a waste of time.
  3. Office hours to help more people — my email is [email protected]. This is more for advising, less potential investments.
  4. Spend less time on Facebook/Instagram — basically don’t open around people and scroll aimlessly.
  5. Call and see friends more — texting/emailing is nice but a call or face to face is always better.