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DeepNewz, mobile.
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The U.S. venture capital (VC) industry is undergoing a consolidation, with projections indicating that 30-50% of VC firms may cease operations. The number of active VC investors has decreased significantly, dropping from a peak of 8,315 in 2021 to 6,175 in 2024, according to data from PitchBook. This decline reflects a more than 25% reduction in the number of firms, as risk-averse financial institutions are increasingly directing their investments toward larger firms in Silicon Valley. The trend has resulted in a concentration of power among a few mega-firms, while many startups, particularly those funded during the 2020-2022 boom, are now facing shutdowns or selling for less than their initial valuations. Industry experts suggest that this culling is a natural and healthy dynamic for the startup ecosystem, allowing founders to retool with new ideas and capital structures.
We (ie US VCs) funded so many companies in 2021 and late 2022. We should be unsurprised that many of them are now shutting down, even those that raised $20M+ The hit rate of VC investment didn't get meaningfully better in the boom time - so shutdown stories will keep coming. https://t.co/Tdc3aQHMX1
"The tally of VCs investing in US-headquartered companies dropped to 6,175 in 2024 — meaning more than 2,000 have fallen dormant since a peak of 8,315 in 2021, according to data provider PitchBook. The trend has concentrated power among a small group of mega-firms and has left…
We are finally seeing that COVID shakeout people warned about in 2023. Lots of companies shutting down or selling for a lot less than they raised. Net-net, it's a great thing for the startup ecosystem. Lots of founders get to retool with new ideas and cap tables. https://t.co/WVHMBhQmuH
