News & Analysis

driven by the PitchBook Platform
Venture Capital

The bubble hasn’t burst, VC is just taking a pause

VC activity has slowed, to be sure, but does that signal that the “bubble” has burst? We don’t think so. Here’s a breakdown of overall capital invested in VC during 1Q, as it pertains to recent historical levels.

Overall U.S. VC activity slowed further in the first

01-nfu.jpg

quarter of 2016, even as capital invested remained at a historically high level. These numbers are in line with what we have predicted in previous editions of our Venture Industry Report: a gradual deflation of activity in the initial stage of a slowing private investment cycle. Ample supplies of capital raised by U.S. firms during 2014 ($34 billion) and 2015 ($37 billion), however, still incentivize VCs to hunt for quality opportunities. Consequently, capital invested remained even stronger than expected, but that can be chalked up to timing as well as the sustained activity of nontraditional VC investors in a handful of massive late-stage rounds—$9.4 billion of the $17.7 billion invested in 1Q was in late-stage financings.

01january-jcg.jpg

This is an excerpt from our 1Q Venture Industry Report. For more insight into VC exit levels, investment by stage/industry and other datasets, download your free copy here.

Join the more than 1.5 million industry professionals who get our daily newsletter!