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VC deals are down, but VC deal sizes are WAY up

No, it’s not your imagination. Venture capitalists are paying more for startups. Much more. And they also have a lot of new funds from which to invest.

Here’s the Q2 2014 roundup:

VC deals

Venture capitalists disbursed $21.5 billion in Q2 2014, which is the largest such number since Q1 2000 (according to PitchBook). Moreover, it’s 68% higher than the $12.8 billion invested in Q2 2013. What’s interesting, however, is that more companies were funded in the year-earlier period (2,110 vs. 1,590). In fact, the number of deals has dropped for four consecutive quarters, while the amount of total investment has risen for four consecutive quarters.

Source: PitchBook
Dan Primack

VC valuations

Median pre-money valuations for all deals climbed from $13.8 million in Q2 2013 to a whopping $24.6 million in Q2 2014 (according to PitchBook) The largest increase was in later-stage deals, but every single part of the VC lifecycle experienced substantial upward pressures.

Source: PitchBook
Dan Primack

VC fundraising

76 venture capital funds closed on $13.9 billion in Q2 2014, according to PitchBook. That’s a whopping increase over the 49 funds raising $6 billion in Q2 2013, and even over the 70 funds raising $11 billion in Q1 2014. The only caveat is that nearly one-third of the Q2 capital raise came from just four firms – reflecting the return of billion-dollar VC funds. Seven of the funds were first-timers, 85% met fundraising targets and the average time from launch to close was 15.4 months.

Source: PitchBook
Dan Primack


28 VC-backed companies priced IPOs on U.S. exchanges in Q2, raising $4.9 billion (according to Thomson Reuters and The National Venture Capital Association). This compares to 37 VC-backed companies raising $3.4 billion via IPOs during Q1 2014, and 22 VC-backed companies raising $2.25 billion via IPOs in Q2 2013. Sixteen of the 22 second-quarter IPOs were for life sciences companies, marking the fifth consecutive quarter of double-digit IPOs for the VC-backed life sciences sector. Twenty-two of the 28 offerings were for U.S.-based companies, although the largest single offering (, which raised $2 billion and listed on the NASDAQ) was for a Chinese company.

97 VC-backed companies were acquired in Q2, marking a slight decrease from Q1 (111) and essentially no change from the year-earlier period (96).

Source: Thomson Reuters  & NVCA
Source: Thomson Reuters & NVCA
Dan Primack

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