Navigating the new startup fundraising landscape
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.]