Data Download: State of VC - NVCA · Data Download: State of VC 1. ... Adley Bowden VP Analysis at...

Data Download: State of VC

1. Venture capital firms and fundraising

2. Venture investment by year, geography, and industry

3. Venture exits with an IPO spotlight

Adley Bowden VP Analysis at Pitchbook Data

[email protected]

Venture Firms & Fundraising

2,105 active U.S.-headquartered VC firms

Source: 2017 NVCA Yearbook

VC Firm AUM picks up after years of stagnant growthVenture capital firms active AUM ($B)

$167

$245$272

$289$315

$333

$0

$50

$100

$150

$200

$250

$300

$350

$400

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: 2017 NVCA Yearbook, Data Provided by PitchBook

Venture firms enjoying several vintage years of market outperformanceVC KS-PME fund benchmarks by vintage

1.07

0.72

1.17

0.90

1.16

1.081.04

1.45

1.30

1.39 1.40

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

PME calculated using Russell 2000® Growth Index

Venture capital fundraising remains healthyU.S. VC fundraising ($B)

$3

5.7

$1

1.8

$1

9.6

$2

4.1

$3

5.1

$3

4.9

$4

1.1

$7

.8

189

118

151

186

267257

275

58

0

50

100

150

200

250

300

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Capital Raised ($B)

# of Funds Closed

*Through 3/31/2017Source: Q1 PitchBook-NVCA Venture Monitor

Venture dry powder at highest level since 2008U.S. VC capital overhang ($B)

$88$96 $94

$88

$77 $79$71

$67$73 $73

$90

$0

$20

$40

$60

$80

$100

$120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

2017201620152014201320122011

Cumulativeoverhang

Overhang by vintage

Source: PitchBook

Venture Deal Flow

Activity off to slow start as GPs study where to invest newly-raided capitalU.S. venture capital deal flow

$2

9.2

$2

6.6

$6

8.7

$7

9.0

$7

0.8

$1

6.5

3,320

4,456

10,565 10,483

8,469

1,808

0

2,000

4,000

6,000

8,000

10,000

12,000

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Deal Value ($B) # of Deals Closed


Venture deal activity has grown at a rate of 7.3% annually since 2016CACGR of U.S. venture deals since 2016

3,320

7,232

0

2,000

4,000

6,000

8,000

10,000

12,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

2006-2017* deal count7.3% CAGR

*Annualized 2017 based on 1Q deal count Source: Q1 PitchBook-NVCA Venture Monitor

744

1,672

5,452 5,683

4,115

2,224 2,223

3,147 3,013

2,496

1,324

1,516 1,951

1,772 1,525

0

1,000

2,000

3,000

4,000

5,000

6,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Angel/Seed Early VC Later VC

All stages are seeing a slowdown in activityU.S. VC deal count by stage

*Through 12/31/2016Source: PitchBook

Valuation growth has largely subsided or fallenMedian round valuations ($M) by round series

$3.7

$8.0 $7.7

$11.9

$21.0$25.8

$27.9

$50.6 $50.0

$0

$10

$20

$30

$40

$50

$60

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

Seed Series A Series B

$55.4

$100.4 $100.0$86.3

$194.8

$160.4

$0

$50

$100

$150

$200

$250

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

Series C Series D+

Source: PitchBook

*Through 3/31/2017 Source: Q1 PitchBook-NVCA Venture Monitor

$1

.4

$2

.0

$1

.5

$1

.6

$1

.5

$2

.0

$1

.8

$1

.9

$2

.3

$1

.8

$1

.8

$1

.6

564

812

681

941 993872

1,061

877 878

575548497

0

200

400

600

800

1,000

1,200

$0

$1

$1

$2

$2

$3

$3

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2010 2011 2012 2013 2014 2015 2016 2017

Deal Value ($B) # of Deals Closed

First financings continue to drop as follow-ons make up bulk of VC dealsU.S. first financing VC activity

VC funding reached 386 congressional districts in 2016 up from 299 in 2011

Source: NVCA Ecosystem Dashboard

Software continues to be the largest area of VC investmentU.S. VC deal count by industry 2016

8%4%

3%

38%

25%

6%

CommercialServicesConsumer Goods &RecreationEnergy

IT Hardware

Media

Software

Other


Life Science deal flow and investment ($B)

310 501

621 541

128

340

595

582

500

139

0

200

400

600

800

1,000

1,200

1,4002

00

6

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

*

Life Sciences deal flowPharma & Biotech HC Devices & Supplies

$7

.5

$7

.5

$9

.1

$1

4.9

$1

1.7

$3

.6

26%28%

21%19%

16%

22%

0%

5%

10%

15%

20%

25%

30%

$0

$2

$4

$6

$8

$10

$12

$14

$16

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

*

Life Sciences capital investmentLife Sciences Capital Invested

($B)


Tech deal flow and investment ($B)

$1

5

$1

0

$1

9

$3

4

$3

6

$3

7

$1

1

1,853 1,835

2,983

4,8784,459

3,614

1,026

0

1,000

2,000

3,000

4,000

5,000

6,000

$0

$5

$10

$15

$20

$25

$30

$35

$40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Capital Invested ($B) Deal Count


Big Data deal flow and investment ($B)

$0.4 $1

.6

$2

.7

$5

.0

$5

.8

$2

.1

59

224

425

563530

188

0

100

200

300

400

500

600

$0

$1

$2

$3

$4

$5

$6

$7

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*



Cybersecurity deal flow and investment ($B)

$1

.5

$1

.0

$3

.6

$2

.9

$1

.0

147

139

269254

70

0

50

100

150

200

250

300

$0

$1

$2

$3

$4

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*



AI deal flow and investment ($B)

$0.2 $0

.7

$1

.7

$3

.6

$1

.5

30

75

252

300

151

0

50

100

150

200

250

300

350

$0

$1

$2

$3

$4

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*



Exit Activity & IPOs

Exit activity sets multi-year low as exit count slides for sixth quarterU.S. venture-backed exit activity

$4

.2

$1

1.9

$3

8.0

$1

0.2

$1

0.9

$1

7.7

$8

.1

$1

4.9

206

277268

238220

190171 169

0

50

100

150

200

250

300

$0

$5

$10

$15

$20

$25

$30

$35

$40

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2013 2014 2015 2016 2017

Exit value ($M) # of Exits Closed

Frosty exit market keeps deal/exit ratio at historically high levelsventure investments (#) compared to venture exits (#)

6.4x

10.0x

7.8x

10.8x 10.8x 10.7x

3,320

10,482

8,469

1,808

518 970 787

169

0

2,000

4,000

6,000

8,000

10,000

12,000

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Investments/Exits # of Investments # of Exits


Corporate acquisitions are the main driver of venture exitsU.S. venture-backed exits by type

413

588 715

792 777 643

132

59

42

60

122 76

39

7

46

64

88

135 117

105

30

-

200

400

600

800

1,000

1,200

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

*

Buyout IPO Acquisition


Healthcare companies lead IPO count for six of the last eight years

0

20

40

60

80

100

120

140

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

*

Materials & Resources

Financial Services

Energy

B2C

B2B

Information Technology

Healthcare


There are over 18,000 active venture-backed companies in the USU.S. VC-backed company inventory by capital raised ($M)

11,313

3,159

1,3911,117 1,127

0

2000

4000

6000

8000

10000

12000

VC-Backed Company Inventory by Captial Raised ($M)

Under $5M $5M-$15M $15M-$30M $30M-$60M $60M+

Source: PitchBook

In summary

1. Venture firms and the asset class as a whole is poised for another few years of growth.

2. Deal activity is cooling, but more in terms of reversion to the mean vs a bubble bursting.

3. The lack of exits is one of the biggest challenges facing venture today and is highlighted by the decline in IPOs.

Data Download: State of VC - NVCA · Data Download: State of VC 1. ... Adley Bowden VP Analysis at...

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