Equity How hard was it to raise venture capital in Q1?
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Apr 6, 2023 Kyle Stanford, a Senior Analyst at PitchBook, dives into the current venture capital landscape, sharing insights on early-2023 trends. He discusses the fluctuations in startup funding, with a spotlight on the stability of early-stage investments versus declining larger deals. Stanford unveils the sectors heating up, and those cooling down, alongside the challenges startups face in fundraising. He also touches on the uncertain exit market and why optimism for IPOs might be misplaced, giving listeners a comprehensive view of the shifting VC scene.
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Q1 2023 Venture Capital Overview
- US venture capital deal volume decreased slightly in Q1 2023 compared to Q4 2022.
- Deal value decreased more significantly, reaching its lowest point since Q1 2018, excluding a large Stripe deal.
Early-Stage vs. Late-Stage Performance
- Early-stage startups appear to be performing better than later-stage companies in the current venture capital market.
- This is because of many smaller deals happening.
Seed-Stage Valuations
- Seed-stage valuations are at their highest, driven by high-quality deals and larger investors moving downstream.
- Revenue multiples, however, are much lower, indicating that higher valuations might be tied to increased revenue generation.