J. Alberto Yépez, co-founder of San Mateo-based VC firm Trident Capital Cybersecurity, was pleasantly surprised by the enthusiasm his firm’s first cybersecurity-focused fund received. The partners had intended to raise up to $150 million, but there was so much interest that they ended up closing an oversubscribed fund of $300 million in January.
“I think we’re beginning to see cautious optimism,” Yépez said, “because of where the public markets are and how the markets are responding.”
Fewer local startups scored venture capital funding in the first quarter of 2017 compared to the quarter before, according to the Venture Monitor report released Tuesday evening by PitchBook Data and the National Venture Capital Association. The drop continues a year-long slowdown of the economic machine that powers Silicon Valley’s tech sector, leaving some startups resorting to layoffs and other cost-cutting measures to make ends meet. But analysts say they’d better get used to it — investment activity isn’t going to return to the highs the industry saw in 2014 and 2015 any time soon. Instead, they say, the lower numbers represent a new, more sustainable normal as investors become more selective.