DETROIT — Seed funding for automotive startups is harder to come by right now, and investor appetite for risk has been pared back, according to a panel of venture capitalists. But there is still money available for promising technologies with good founders and the right business plans.
Speaking Tuesday at the Automotive News Congress, the three venture capitalists said early-stage investors have pulled back substantially from automotive in the past two years, leaving many startups to turn to creative financing and longer ramp-ups before they are able to attract significant venture capital investments.
"A couple of years ago, even sort of mediocre companies that hadn't had much in the way of milestones were able to raise financing," said Reilly Brennan, founding partner of Trucks Venture Capital, a seed-stage venture capital fund with more than 50 venture investments in transportation. "In some ways, it's kind of just a tighter sort of look at the Darwinian nature of startups."