The venture capital landscape is undergoing notable changes as 2024 sees a significant decline in first-time fund formations. According to data from StepStone Group, only 21% of the peak number of first-time VC funds raised in 2021 has been achieved in 2024 year-to-date, with a total of 804 funds raised since 2020. Among these, 600 funds were capitalized at less than $50 million, while only 5% exceeded $200 million. Additionally, 41% of VC funds raised have not gone on to raise a subsequent fund, highlighting challenges in the market. The data indicates that the number of first-time funds in 2024 is down approximately 80% from 2021, and 75% of new funds in the past five years were also under $50 million. Furthermore, only about 47% of new funds established in 2019 have successfully raised a second fund. These trends suggest a tightening venture capital environment as firms navigate shifting valuations and fundraising difficulties.