#62 VC Market Data for Fund Model Updates

Hi Everyone! đź‘‹ Welcome to the new members of @TheFundCFO crew! Appreciate you reading and sharing last week’s post (#60 Emerging VC Fund Tech Stacks), our most-read post in 2023. Check it out!

Every Tuesday/Thursday, we bring you actionable tools, real-world experiences, and insider insights for #VC CFOs/Finance Pros and fund managers, #LP investors, and general industry enthusiasts/people who want to learn :).

“Imperfect action is better than perfect inaction.” -Harry S. Truman

Model Updates: Use the Latest Market Data

Now that Q1 is in the rearview and audit/taxes are done (we hope), it’s time to revisit those 2023 full-year plans, budget forecasts vs. actuals, and fund models!

It’s important to incorporate the latest data in your fund models, for both existing portfolio companies and future investments. If you’re earlier in your fund modeling journey, you can reference our prior posts (#31 VC Fund Model & Budget).

The good news is that industry data sources are publishing insights quickly following the conclusion of each quarter. As a VC investor and/or finance pro, it’s now your job to take that data and adjust your models accordingly.

Looking at the most recent data, here are three key items for your fund model updates (we focused on seed stage but data on all stages is available in the linked reports):

  • Round sizes: median seed deal size of $3m

  • Valuations: median of seed valuation $13m pre-money ($16m post-money)

  • Pacing: still slow, only ~3k deals across US VC

Next level thoughts/insights: what does all this mean for historical graduation rates (lower them), return of capital (more of it), and Series A+ fundraises (smaller dollars, higher threshold required by these investors)?

A Picture is Worth 1,000 Words - The Story by Charts

Here are some of our favorite data sources with links to the full report. For you, dear reader, we’ve pulled out some of the charts and takeaways that matter most!

VC activity dropped in all stages and sectors in the first quarter of 2023:

In Q1’23, there were ~3k deals totaling ~$37 billion.

Deal Activity

Angel and seed rounds have hit a 2.5-year low in the US. Source: PitchBook-NVCA Venture Monitor Q1 2023
Series A and B rounds at an 11-quarter low in the US. Source: PitchBook-NVCA Venture Monitor Q1 2023
Series C & D rounds haven’t been so low in 5 years. Source: PitchBook-NVCA Venture Monitor Q1 2023

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