Early-stage startups are facing increased scrutiny from investors as the venture capital landscape shifts in response to a downturn in risk capital investing. Data shows that the number of unique investors participating in VC deals in the U.S. has decreased significantly, from 15,303 in 2023 to 11,425 in 2024, marking a 25% drop in active VC investors. This trend reflects a broader slump in venture investment that has persisted for over two years, with the third quarter of 2024 failing to reverse the decline despite strong interest in the AI sector. Additionally, the fintech sector is experiencing a notable drop in funding, prompting dealmakers to concentrate on fewer, larger investments, with the average deal size remaining steady at $12.7 million. Notably, the number of new crypto VC funds has also diminished, with only eight funds raising a total of $140 million in the last quarter, the lowest since Q3 2020. Furthermore, down rounds in venture capital are at a decade high, compelling founders and investors to recalibrate their market expectations.