AngelList - The State of U.S. Early-Stage Venture, 1Q 2023

The State of U.S. Early-Stage Venture report for 1Q23 provides an overview of the early-stage venture market in the United States during the first quarter of 2023. While the market has seen some challenges, there are still bright spots to be found. More positive activity came from later-stage deals, but early-stage deals (pre-seed and seed) made up the lion's share of investment activity on AngelList in 1Q23. Over 60% of deals on AngelList in 1Q23 used a SAFE, and AI/ML was the second most popular sector to invest in on AngelList in 1Q23. Seed-stage valuations for AI deals increased 33% over the previous quarter. Funding to female-founded startups rebounded to levels not seen since 1Q22. The report notes that early-stage venture is in a transitional period, with valuations in flux as VCs adopt a more judicious approach to how they deploy capital. However, the new wave of AI technologies carry the potential to lift early-stage venture performance out of this slump. The report suggests that the emergence of a new dominating wave of technology and the generally depressed fundraising environment may make this an unprecedented time for willing investors to jump into the market and capitalize on lower prices and decreased competition. It's worth noting that the report includes a number of disclaimers and caveats, so it's important to read the full report and consider the context of the data presented.