NVCA & Pitchbook – Yearbook, 2024

In 2022, the VC sector faced significant challenges due to geopolitical events and economic uncertainty. The aggregate value of quarterly venture deals dropped by nearly 50% between the second and third quarters of 2022. Investors adapted by aggressively fundraising and reducing outlays. In 2023, $170.6 billion was invested in 13,608 deals, with a shift towards later-stage investments. The proliferation of consumer-facing artificial intelligence tools was a key trend, with generative AI tools gaining traction. The exit environment in 2023 was uncertain, with the lowest exit activity in a decade. Industry dry powder has been increasing, raising concerns about LP reluctance to allocate to venture. Geopolitical tensions between the United States and China added to market uncertainty. Overall, the VC industry faced challenges in adapting to a changing economic and geopolitical landscape in 2022 and 2023.