The Bloomberg U.S. Startups Barometer is a new weekly indicator that tracks the overall health of the business environment for private technology companies based in the U.S. The index incorporates both the money flowing into VC-backed startups, as well as the exits that are making money for investors.
For example, last week the Barometer was up 31.77% from a year earlier. It is a composite of 4 definitive indicators, each with its own ability to provide signals to the observant, as follows:
Deals: (Up 36.25 deals per week or 16.00% over the past 12 months)
Tracks the number of times startups raised money from investors. Healthy deal activity suggests a bullish environment for startups.
Deal amounts: (Up $748M per week or 81.37% over the past 12 months)
Tracks money startups raised from investors. The presence of big deals can create spikes in funding numbers, often reflecting a booming market for mature private companies that command high valuations.
First financings: (Up 13.08 deals per week or 16.27% over the past 12 months)
Tracks the number of startups that raised money from investors for the first time. Access to financing for fledgling businesses shows a healthy entrepreneurial ecosystem and investor appetite for the riskiest bets.
Exits: (Down 2.67 deals per week or 39.59% over the past 12 months)
Tracks the number of startups that were either sold to another company or filed for an initial public offering. Successful exits shape the funding environment for the rest of the industry because they return capital to shareholders and create wealth that can be used to fund other startups.
If you believe that “when the U.S. sneezes, the rest of the world catches a cold”, then you would be well advised to monitor this Barometer, wherever you are on the planet.