Since its inception in the mid-1900s, venture capital investment has grown from a quirky funding option to one of the must-have sources of money for a variety of industries. While this funding source has provided many companies with the crucial capital needed to grow their operations and bring their products and services to bigger market share, there's been an increasing concern about which businesses are receiving funding.

Funneling money upward
A recent trend in the venture capital sphere has been larger companies accumulating a greater share of the available VC funds. For instance, Technology Crossover Ventures, a venture firm, raised $2.5 billion during the second quarter, The New York Times reported. With $8.8 billion collected during the second quarter, this number represents more than 25 percent of the second quarter of venture capital during this time period.

Further, going back through the first half of the year, five venture firms - out of the nearly 800 firms in the U.S. - raised $7.4 billion, or roughly one-third of the $22.9 billion VCs amassed in total, The National Venture Capital Association reported. As larger firms continue to consume a bigger piece of the available funding, it has the potential to create downstream ramifications.

Who's missing out?
On the other end of the spectrum, fledgling technology startups and burgeoning small businesses are being quickly bought out by the giants, like Facebook, Google and Apple, who want the talent and patents held by these smaller firms. In addition, companies on the low end are also benefiting from interest in wealthy individuals providing angel and early-stage seed investing for startup funding.

In light of these funding dynamics, the one vertical left out in the cold by this concentration of capital has been the midrange firms. These are companies that may employ tens of thousands of workers and generate a few hundred million in revenue each year. If these enterprises have less access to venture-capital funding, they may be unable to remain competitive or expand their operations.

In addition, tech companies are increasingly turning to the cloud for their computing infrastructures, which is also hurting midrange firms since the cloud business is dominated by a handful of companies as well, mainly Google Amazon and Microsoft. With these big cloud giants also attracting a larger share of the market, it will challenge the growth opportunities and long-term sustainability for many mid-range firms.

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