With smartphones and tablets now ubiquitous in the United States and around the world, it’s no surprise that venture capital investments in the software and applications that make these devices so enjoyable have greatly increased over the last few years. But what about VC financings in hardware, semiconductors and communications & networking—the core of what makes technology hum and what allows software to run in the first place?
Turns out VCs have spurned the hardware sector in recent years, instead opting to fund startups in the cheaper software space. After collecting 399 VC financings worth $5.4 billion in 2004, non-software IT managed to generate a comparatively paltry 230 rounds worth $2.8 billion in 2013.
This is evidence of growing reluctance on the part of venture capitalists to “fund the future.” But, why is this the case?