VC-backed startups raised more money in 2024 than 2023 - so why doesn't it feel better?
Because the "vibe" around venture-backed startups is dictated far more by the number of rounds than it is by total dollars invested.
Table below shows the change year over year for rounds and total cash raised in each venture stage. Data is January thru November for every year in order to make the comparison fair.
For example: there have been 2,863 early-stage US rounds on Carta this year which is a 13% decline from last year.
𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝗙𝗶𝗻𝗱𝗶𝗻𝗴𝘀
Total rounds and total cash fell in the SAFEs/Notes category as well as early-stage (Seed + Series A). Effectively the earliest parts of venture had a not great year.
The declines in early-stage were much more gradual than the declines in late-stage after the downturn began in 2022. Perhaps this is because late-stage is much more sensitive to public company trends?
Late-stage (Series D+) saw $7.6B more capital invested this year on only 29 more rounds than last year. That extra capital swamps any declines in the early stages.
Valuations in early-stage venture have remained historically high even as the total capital and number of rounds has declined. Lots of stories to be written about multi-stage funds playing more in early venture, etc.
So what happens in 2025? My best guess is:
1. Late-stage continues to rise as IPOs return (if only gradually)
2. Early-stage continues to be strange as funding gets a little better but also more companies attempt to bootstrap / angel fund beyond the traditional seed metrics
3. The AI bubble tickles out of SF and starts impacting other markets more significantly
May we live in interesting times 🙏
#startups #venturecapital #founders #fundraising
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