March 26, 2025
Survey: The State of Venture Capital
Aumni and Fenwick recently released their latest “Venture Beacon,” a quarterly report on the state of the venture capital market. This one covers the fourth quarter of 2024, and this excerpt highlights some of the survey’s key findings:
– The second half of 2024 saw improvements in capital raised and pre-money valuations, particularly at the top end of the market, suggesting potential positive momentum into 2025.
– Down rounds decreased in prevalence for late-stage companies, and extension rounds returned to levels seen in 2019 and 2020, indicating a relative improvement in market health.
– Despite the increase in up rounds and pari passu financings for late-stage companies, there was a notable increase in the prevalence of pay-to-play provisions in Series B and later rounds, continuing an upward trend since 2022, highlighting a strategic shift towards restructuring preference stacks and
prompting investors to support later stage companies in achieving stability and growth.– Startup cohorts from 2021 and 2022 were less likely to secure follow-on capital within two years compared to those from 2019 and 2020, highlighting ongoing challenges in deal velocity and graduation rates.
– While there are encouraging signs of growth, extended fundraising timelines and lower stage-to-stage graduation rates suggest that stakeholders should remain vigilant to both opportunities and potential challenges in 2025.
– John Jenkins