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PitchBook Analyst Note: When Dry Powder Stays Dry

Q1 2023

PitchBook Analyst Note: When Dry Powder Stays Dry

January 26, 2023

A case of chronic dry powder 

There's a hiccup in the private markets that almost no one is talking about: the disconnect between the capital startups are seeking and the money VC firms are actually investing. Our latest analyst note dives into this imbalance and explores what it means for valuations, deal terms and startups going forward.

Takeaways include:
  • Capital demand outpaced supply in some cases by over 145% in Q4 2022. Overall, more than twice as much capital was requested than supplied.
  • The PitchBook Dealmaking Indicator is showing a sharp turn toward a more investor-friendly environment.
  • All venture stages are affected, but the late-stage VC market shows the greatest imbalance.

Table of contents
Key takeaways 1
Overview 2
Venture growth 6
Late stage 8
Early stage 9