Q2 2020 was truly unprecedented for the venture capital (VC) industry, as the COVID-19 pandemic, nationwide lockdowns, stay-at-home orders, and a major economic downturn shook the entire country; however, the venture industry largely proved resilient. Fundraising remained strong as VC mega-funds ($500 million+) have been especially prolific in 2020 with 24 closed so far, which nearly equals the full-year number for 2019. Deal activity has been mixed with the overall deal count dipping while strength in late-stage financings sustain aggregate capital investment. The first half of the year has seen a more subdued market for VC liquidity than what we recorded in 2018 and 2019. Exit count in 2020 is tracking to be the lowest since 2011, and value is pacing to drop back toward the levels seen pre-2017. The short-term aspect of this drop in liquidity is crucial, as an extended economic decline would change some longer-term behaviors around commitments to VC.
This report was sponsored by NVCA, in partnership with Silicon Valley Bank and Certent. Interested in sponsoring future editions of this report? Visit our media partnerships page to learn more.