#173 VC Market Insights (Mid-August)

August 15, 2024

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Top takeaways:

  1. Fundraising grew from $18.7b (Q1) to $20.9b (Q2) across US startups

  2. Down rounds fell from 24% to 17% Quarter over Quarter. Good news! Down round percentages had been climbing since mid-2022

  3. Percent of bridge rounds fell for every stage except seed. More capital betting on new companies vs supporting current ones from VCs (so good for some, bad for others)

  4. Number of total acquired companies hit the highest mark since Q3 2022

  5. Strong median valuations at Seed ($15m pre-money) and Series A ($40m pre)

Median Pre-Money Valuations:• Seed: $14.9M• Series A: $40M• Series B: $116M • Series C: $232MOverall Trends: • Valuations are on the rise across the board, but —(1) All valuations except seed are below their peak over last two years—(2) Deal volume remains muted or lower.Key Insights: Seed Stage• Deal volume is down 30% from Q1 2022 and flat from the previous quarter, but pre-money valuations are up over ever quarter• Indicates increased competition for high-quality seed deals• Investors concentrating on fewer startups but prices remain elevatedSeries A Crunch • Significant jump from Seed ($14.9M) to Series A ($40M) • Creates a Series A crunch, particularly for startups with high seed valuations • Top quartile Series A is down -19%• 5:1 ratio: it takes 5 seed companies to close 1 Series A companyLater Stage Resilience• Stable valuations at Series B ($116M) and Series C ($232M)• Flight to quality and pressure to deploy bigger checks keeps these companies afloat and growing

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