The technology ecosystem is on fire like never before. Seriously, look at the chart we’re about to throw at you. In the first half of 2021 more venture capital was deployed than in any ENTIRE year prior. Yeah, it’s en fuego up in here. Times are changing so ya better pay attention.

Woah. Thank you Crunchbase for a beautiful graphic. What’s happening here?

Low interest rates worldwide are driving a search for portfolio yield from institutional investors into higher risk assets. Private investments, like middle & late stage technology companies, fit that profile.

The exit boom of the past few years in technology has de-risked, to an extent, the hesitancy of investor dollars to enter the private technology investment space. SaaS and its repeatable cash flows just aren’t that risky past a certain stage when you look at the data and returns from the last decade in aggregate. Marketplaces? Those have gotten pretty gigantic. Network effects! Ever heard of them? We could go on and on..

Sam Lessin the investor, tweeter, & contributing author brilliantly wrote an Information article last week titled The End of Venture Capital As We Know It (emphasis ours):

What is really happening is that capitalism is functioning as intended—and as it has worked throughout history. The era of West Coast–style venture capital that has been shaped by the growth of the software industry is coming to an end.

In any new market, venture capitalists come in and provide very expensive capital for high-risk, high-reward propositions at the frontier.

Over time, these investments in new industries become better understood and instrumented.  Their risks and opportunities can be more easily measured, and investors across the board price them more or less the same way. As these shifts occur, massive flows of capital follow and investors compete with each other to offer industry builders cheaper and cheaper money.

The fundraising environment is getting much more competitive! Entrepreneurs and their cap tables are the current beneficiaries of this explosive trend. Especially in the late stage market – think Stripe, Instacart, etc. Does a week go by without news from Tiger Global, Softbank, Blackstone or Vista Equity Partners closing a massive deal? Exactly.

And do you know who’s next? Right around the corner? That’s right. The fearless leaders within those middle & later stage companies. The managers! So get ready, it’s the season for compensation tailwinds.

There’s plenty of articles about tech giants like Google and others cutting pay for remote workers who choose to stay at home or move to areas with lower costs of living. Interesting.. Based on the dollars flowing into technology you should feel pretty confident that trend will reverse…real fast. The competition for talent, in these most competitive of markets, will continue to ascend regardless of location. Promise.

After all, the only thing technology companies need more than servers to run their apps is people. Great people. Maybe you’ll get a raise in the months ahead? You deserve it!