Last month, the latest PitchBook-NVCA Venture Monitor was released. The report is chock-full of visual representations and analysis of what went on in the US venture capital industry over the third quarter of 2017. The full 30-page Venture Monitor is available to download for free, but for a quick, comprehensive look at industry trends, we’ve put together a collection of key charts from the report.
2017 on pace for record deal value
As of the end of the third quarter, this year is set to reach a decade-high in terms of total VC investment—but deal activity is on pace to decline sharply for the second year in a row.
$20B+ invested in each of last two quarters
Although the number of deals closed has dropped from its high in 2015, the average quarterly deal value for 2017 is coming in at more than $20 billion.
Deals getting bigger by the year
“Series A is the new Series B” is a common refrain from this year, and the numbers support it. So far in 2017, the median early-stage deal size of $6.1 million has surpassed the median late-stage deal size from 2010, when it clocked in at $6 million.
Unicorn deals driving big round sizes
The huge amount of VC investment over the last two quarters can be explained in part by the enormous round sizes that have become the new normal. For example, WeWork raised a total of $4.4 billion last quarter, and Airbnb pulled in a billion-dollar round in 2Q.
Valuations on the rise
As round sizes have increased, pre-money valuations have done the same, especially in late-stage rounds. In fact, there is currently more than $575 billion in value locked up in companies valued at over $1 billion.
Angel & seed deal activity dropping
Total capital invested across angel and seed deals has risen on both a quarter-over-quarter and year-over-year basis, but deal count looks to be on the decline.
Robust deal value for early-stage companies
Deal activity for early-stage VC-backed companies dropped in 3Q, but capital invested at the stage has been very strong over the last two quarters.
Strong year for late-stage deals
So far this year, more than $36 billion has been invested in late-stage VC-backed companies. That’s higher than any year prior to 2014 during the last decade. Roughly 50% of the capital has gone to deals of $100 million or more.
Popular sectors holding steady
Software is the most popular industry for VC investors, a trend that’s remained unchanged as the years have gone by. Other industries are maintaining historical figures, too.
First fundings on the decline
The number of first-time financings has been on a downward pattern for the last three years. Total deal value for the category has also dropped slightly, but not as dramatically.
Sluggish exit environment
Just 530 exits were completed over the first nine months of the year, including just 144 in 3Q, the lowest quarterly total since 2009.
Growth in fundraising slowing
There was a slowdown in VC fundraising in the third quarter, both in terms of capital raised and the number of funds closed. The drop has tempered the previous speculation that 2017 could surpass 2016 for fundraising activity.
First-time and micro funds going strong
First-time funds are likely to reach a decade-high in capital commitments this year. The same is true for micro-funds.
West Coast pulling in plurality of deals
The West Coast has been home to the lion’s share of completed deals and deal value, followed by the Mid-Atlantic region, which includes New York.
Check out the full report right here.
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