Venture Firms’ $290 Billion ‘Dry Powder’ is About to Revive Startup Funding

Startup founders should expect a tidal wave of venture capital interest next year as a record level of dry powder pressures VC funds to step up their investment pace, according to a new analysis of these cash reserves.

U.S. VC investors are sitting on $290 billion, including $162 billion reserved specifically for new investments, according to Jon Sakoda, founder of early-stage venture firm Decibel Partners, who analyzed nearly a decade of venture fundraising and investment activity. That means VC firms should return to or even surpass last year’s blockbuster investing activity next year.

“The fundraising has been so substantial even though it feels like things are slower,” said Sakoda. “At some point the floodgates will open.”