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DeepNewz, mobile.
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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
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.
