#106 VC Fundraising Down & The "Why Now?"

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VC fundraising is on track to close the year with $57 billion—67% below the 2022 record—and 459 funds, the lowest fund count since 2013, according to the latest PitchBook-NVCA Venture Monitor.

"[The] venture fundraising environment has been one of the worst in the first nine months of this year that we have seen in the past decade," said Brijesh Jeevarathnam, global head of fund investments at Adams Street Partners, an LP in many VC funds. "After [a] sluggish four, five months, things are picking up for the next six to 12 months."

Blessing in Disguise? The "Why Now?" for PE/VC Funds

Last week, the Pitchbook-NVCA Venture Monitor was released w/ Q3’23 data. As we’ve moved through 2023, we’ve referenced data from Jamesin Seidel (Q3 2023 Funding), Crunchbase, Pitchbook, Carta, and others. In Q1’23, Bain released their annual Global Private Equity Report and Pitchbook released their Private Benchmarks Report. It’s worth revisiting today to consider what you can do about it now (before everyone else has the data). The TLDR:

Less money is flowing into private equity & venture capital (funds and companies) in 2023 and likely 2024. We believe this creates an opportunity for outstanding performance. Historical data supports this.

Diving Deeper: The Case for “Why Now?” in Charts & Data

Let’s dive deeper. What are the best charts and data points that you can leverage in your next investor update, presentation, or in conversation on the “why now?” for private equity and venture capital? We’ve reviewed the key reports and insights (linked above) to make the case clearly for the “why now?”

Investments made in a downturn outperform over time (Bain)

Venture Capital Returns Spike Post-Downturn (Pitchbook)

Takeaway: Less money is flowing into private equity & venture capital (funds and companies) in 2023 and likely 2024. We believe this creates an opportunity for outperformance. Historical data supports this.

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