NVCA: U.S. venture capital hits lowest in two years

by | Oct 13, 2022 | Technology

U.S. venture capital investments fell to the lowest level in nine quarters in the third quarter ended September 30, according to the Q3 2022 PitchBook-NVCA Venture Monitor.

The market stall came as the VC ecosystem is showing more signs of distress in response to ongoing economic headwinds. But it’s also happening at a time when VCs are sitting on a lot of dry powder. The report is jointly produced by PitchBook and the National Venture Capital Association (NVCA) with support from Insperity and J.P. Morgan.

Deal counts fell across all stages for the second consecutive quarter after reaching a record high in Q1 2022 and total money invested reached a nine-quarter low, cementing a tone of investor hesitancy and increased focus on business fundamentals.

This pullback was especially pronounced at the late stage, where nontraditional investors – the largest drivers of mega deals and the overall growth seen at the top of the market – slowed investment in VC-backed startups. Aside from several outsized deals in Q3, annual exit activity has also been lethargic, with 2022’s exit value on pace to fall below $100 billion for the first time since 2016.

NVCA: Deal making is in decline.In stark contrast to deal and exit activity and value, VC fundraising has already reached a new annual record in the first three quarters of the year. With over $290 billion in dry powder, by far the largest amount that has ever been stored in VC funds, general partners have more tha …

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