The startup industry is already seeing significant changes in current funding trends. Once considered as the ace of the funding pyramid, the Venture Capitalists no longer have the leverage. Instead, super angel investors are taking the place of the VCs’.

Big investment corporations are no longer considered as the top of the funding pyramid. Because of multiple debacles in large scale startups like Uber, VCs’ are more reluctant to pour massive investment. In this turmoil, big-scale angel investors, popularly known as Micro-VC, are taking the place in the top.

Because of this major shift in funding patterns, 2020 will be marked with the following trends:

Startup starting cost will go down 

The cost of setting up a new startup will go down throughout the year. Thanks to web software and mobile apps that make things so affordable.

This low cost opens up opportunities for angel investors to gain momentum in the industry.

Size of some VC firms will slow them down

Size does matter! Large scale VC organizations sometimes slow down because of their massive size. They are not adaptable enough to cope with the fast-changing market. As a result, a big number is disappearing and the rest are slowing down.

Quantity will take over Quality 

It was common for VCs’ to do extensive research and invest a large amount on a few selected startups. However, this formula is not working anymore. 

Now the trend is to invest small amounts into smaller startups and wait for something fruitful.

Micro VCs’ will have more success 

The micro VCs’ will see more success due to their adaptability and large portfolio. These smaller organizations can both introduce and merge ideas for more success.

VC funds will still have a big share

Despite slowing down, VC firms will still have a big share in the funding funnel. Some of them will adopt the ‘spray and pray’ pattern for better success.