US venture capitalists have never had so much spare cash

You might think given the chatter in the startup world that venture capitalists are short on funds — after all, we’re hearing about young tech companies finding themselves marooned between stages, hitting up investors with smaller capital pools than prior backers¬†and turning to equity crowdfunding to keep their cash balances healthy.

And yet new data from PitchBook and the National Venture Capital Association indicate that while the pace of U.S. venture capital investment is slowing — more here on the global perspective — American venture capitalists are sitting atop more investable capital (dry powder) than ever before.

Even more, the pace at which venture investors are accreting funds is elevated compared to historical norms, meaning that private-market investors are in aggregate not struggling to raise, even if their portfolio companies may find themselves in a very different situation.

The question bouncing around our minds this morning is why — why are venture investments slowing when so much capital has been raised by VCs to invest?

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