2023 was not a great year for companies raising venture capital. The data confirms - by total capital raised, total deal volume, and median deal size and valuation - that the market is well below its peak from the turn of 2021 → 2022.
There are some notable trends in the year’s data. Later stage rounds took a much bigger hit relative to early stage (likely due to their proximity to the public markets and IPO expectations). And - despite the broader market’s recovery (S&P +25%) - venture has been slower to recover.
We were curious about the behavior of the “brand name investors” - the larger funds that most founders think about first when preparing to raise money. Many of these firms announced new funds in the last year - despite overall LP skittishness around the asset class. These firms have money, but are not necessarily deploying it.
We looked at a representative sampling of 15 investors. The number of Series A, B, and C rounds that they led dropped 68.1% from 2022 to 2023, compared to a drop of 43.2% in the broader market. These investors led 476 rounds in 2022 but only 152 in 2023.
There are a number of theories we could propose as to why our subset of funds have reduced activity more than the broader market - but given that they don’t act in concert with one another, there isn’t going to be one single reason.
Ultimately, the most important lesson for founders is that deals are still happening, but the best known funds are less likely to do them. Founders should absolutely be pitching the funds they know, but need to work hard to identify other funds that might be more likely to fund their companies.
Series A
Number of Rounds: 1,889
Median Round Size: $12.05M
Rounds led by our chosen 15 investor list, in 2023: 86
Rounds led by the same investors, in 2022: 292 (-70.5% YoY)
Series B
Number of Rounds: 766
Median Round Size: $26.61M
Rounds led by our chosen 15 investor list, in 2023: 50
Rounds led by the same investors, in 2022: 129 (-61.2% YoY)
Series C
Number of Rounds: 258
Median Round Size: $50M
Rounds led by our chosen 15 investor list, in 2023: 16
Rounds led by the same investors, in 2022: 55 (-70.9% YoY)