Equity Venture's Q2 was calm (and that's not good)
Jul 19, 2023
In this engaging discussion, Kyle Stanford, Lead Venture Capital Research Analyst at PitchBook, dives into the turbulent waters of Q2 2023 in U.S. venture capital. He highlights the alarming slowdown in exits and its detrimental effect on fundraising efforts. Seed deals and down rounds are scrutinized, revealing a challenging landscape for early-stage investors. Kyle also reflects on Kava's IPO and its influence on investor sentiment, while hinting at some promising trends that could signal hope amid uncertainty.
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Q2 Venture Capital Overview
- Q2 2023 was a calm quarter in venture capital, which isn't positive.
- Exits and fundraising were low, deal activity flat, and deal value concentrated in a few large, non-indicative deals.
Non-Traditional Venture Deals
- Large deals like Stripe and OpenAI skew venture capital data but aren't traditional venture deals.
- These deals often involve structured investments for near-term liquidity, not growth.
Venture-Backed Company Growth
- There are approximately 50,000 venture-backed companies in the U.S., which is double the number in 2016.
- This increased competition for capital, combined with a slow exit market, contributes to the rise in down rounds.