Where oh where did the venture investment go?
I'm sure it's unsurprising to you, dear reader, that total capital invested is down across nearly every venture stage if you compare 2023 activity to 2021. That's what all the headlines have been blaring!
But when you segment the data more granularly, an interesting pattern emerges.
Fundraising for pre-seed companies (defined here as companies raising less than $1 million on a SAFE or a convertible note) is actually more than 50% higher than in 2021.
Some thoughts on what's happening underneath the numbers:
I'm sure some of the companies that raised less than a million were actually attempting to raise more (which would have put them in the "seed on SAFEs" category). Not all positive here.
The shift to SAFEs has deeply impacted the seed figures. More founders eschewing the time and cost of a priced round in favor of major SAFE raises. Pros and cons to this strategy.
One major pro - you can create, wire, sign, and fund SAFEs in under 10 clicks on Carta for free.
Clearly rough times at the mid-to-late stages. The pace of decline over the past year has barely slackened at all. Venture needs a late-stage revival for 2024 to rise above the capital storm clouds.
As we've said for a year now - it's a great time to start a business and a damn difficult time to grow one. Salute to the founders.
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Peter Walker
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