If you are fundraising or thinking about fundraising for your startup, you need to read this report.
Carta’s VC Fund Performance Report reminds us that we are living in a time of careful deployment and a high percentage of zombie funds. Whatever the market was from late 2020 through 2021, the current market is almost the opposite.
🐢 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗗𝗲𝗽𝗹𝗼𝘆𝗺𝗲𝗻𝘁 𝗦𝗹𝗼𝘄𝗲𝗱: Funds in the 2022 vintage have deployed only 43% of their committed capital at the 24-month mark, the lowest share of any analyzed vintage.
🌱 𝗙𝗲𝘄𝗲𝗿 𝗚𝗿𝗮𝗱𝘂𝗮𝘁𝗶𝗼𝗻𝘀: Only 15.4% of startups that raised a seed round in Q1 2022 made it to Series A within two years.
⤵️ 𝗗𝗿𝗼𝗽 𝗶𝗻 𝗙𝘂𝗻𝗱 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲: Median TVPI for the 2021 vintage remains below 1×, trailing behind earlier vintages that had 85% of funds crossing the 1× mark.
📉 𝗜𝗥𝗥 𝗗𝗲𝗰𝗹𝗶𝗻𝗲: Median IRR for the 2021 vintage is still in negative territory three years in, a stark contrast to the 19.4% IRR seen in the 2019 vintage.
⏳ 𝗟𝗼𝗻𝗴𝗲𝗿 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗖𝘆𝗰𝗹𝗲𝘀: The median time between a seed round and Series A has stretched to over 2 years, and between Series A and B to 2.5 years.
[Thankful to Peter Walker, Michael Young, Alex Lester, and Kevin Dowd for putting this together.]