Feed: Slashdot
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Title: AI Investments Are Booming, but Venture-Firm Profits Are at a Historic
Low
Link: https://news.slashdot.org/story/24/11/18/1322...
Silicon Valley's venture-capital firms are having an easy time finding
promising startups to back. The hard part is cashing out. From a report: Last
year, U.S. venture firms returned $26 billion worth of shares back to their
investors, the lowest amount since 2011, according to the data provider
PitchBook. Startup investors say 2024 has continued the trend, with high
levels of investment and few acquisition deals or initial public offerings.
"We've raised a lot of money, and we've given very little back," Thomas
Laffont, co-founder of investment firm Coatue Management, said at a recent
conference. "We are bleeding cash as an industry." Last year, U.S. venture
firms invested $60 billion more than they collected, the highest such deficit
in PitchBook's 26 years of data. As a result, the investors that back VC
firms, such as university endowments and pension funds, aren't seeing the
type of profits the industry has long delivered. The decline is particularly
notable because the past three years have been the highest three on record
for total VC firm investments since 1998 -- as far as back as the PitchBook
data goes. Much of that money has recently gone to artificial-intelligence
startups -- a white-hot space in which valuations are rising fast and
companies quickly burn through cash to develop new technology.
Read more of this story at Slashdot.
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