Here Is Your Q2 Venture Capital Cheat Sheet

TL;DR: Here is every piece of Q2 reporting you need in order to fully understand the state of the venture capital.

It being Monday, and you being behind on email, this is the perfect moment to collate all our second-quarter venture capital reporting into a single place for both future reference and current use. (Here’s the Q1 edition of this post.)

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What do you need to know going into the reports? That the tech bull cycle continues, the Nasdaq index is trading near record highs, and there are more than 250 unicorns operating today. News out from the venture world shows new, big funds, big rounds, and other bullish indicators.

But while the creation portion of tech looks healthy, the exit market is lacking. The tech IPO market remains tepid, and M&A of venture-backed companies is down. To sum, what goes in (venture, talent, ideas) look good. But what comes out looks worse.

But that’s the last few years to date. What happened in the second quarter of the year? Let’s find out:

Inside The Q2 2017 Global Venture Capital Ecosystem

Our longest entry of the quarterly cycle is our global report, which takes into account a host of information concerning the venture industry from all around the world.

This quarter, the results were summed in the following way:

One thing is clear: the market for startup equity is on a firmer footing now than it was three months ago. With two successive quarters of growth, both in the number of deals struck and the amount of money invested, as well as a growing appetite on the part of public markets for shares in venture-backed startups, there’s reason for cautious optimism going into the second half of this year.

That improvement is well-shown by the following chart from the post:

U.S. Venture Investment Ticks Up In Q2 2017

Scaling down from the world to just the United States, our US Q2 VC report showed some progress from the year-ago (2016) second quarter, but not much change from five years ago.

To wit, here’s the critical summary from the piece:

Venture investment in U.S. startups rose sequentially in the second quarter of 2017, boosted by large, late-stage financings and a few outsized early-stage rounds in tech and healthcare.

Overall, Crunchbase projects that U.S. startups raised $22.7 billion across all stages, from seed through technology growth rounds. That’s up from $20.6 billion in Q1, which is typically a slightly slower quarter, and about flat with year-ago levels.

The five-year mark point is interesting; things have been strong in venture here at home for a long time. Of course, all things continue until they cannot, to butcher the phrase, but for now, it’s good days for startups looking to raise in the United States.

Here’s a chart to make the point:

Austin Keeps Crown As King Of Texas VC In Q2

Scaling down once more, this time from the nation to a single state, Crunchbase News took a look at Texas in our second quarter series.

Why Texas?

First, it is home to Austin, an important startup and tech-culture hub. Second, Texas is decidedly not Silicon Valley, giving us a different look at the tech market.

We won’t always look at Texas on our venture reports, but since Mary Ann Azevedo was already on-site, it seemed like the right call.

How are things in the Lone Star State?

Venture capitalists pumped $385.9 million into Austin startups across 40 deals in the second quarter, according to Crunchbase data. Dallas companies raised $142.2 million in 16 deals in the same time period while Houston startups brought in $42.1 million across eight transactions. A lone investment was made in San Antonio during the second quarter, valued at $1.1 million.

For the state as a whole, dollar values are way up (24 percent year over year) even though the actual number of deals is down (43.48 percent) – signaling larger investment sizes.

I have the key chart for you as well:

VCs Hit Brakes On Workplace Collaboration Startup Funding In Q2

From the world to the country to just one state to just one technology niche, Crunchbase News took a peek into the realm of workplace collaboration startups. After all, there has to be more at play than just Slack, right?

Unlike the venture world as a whole, the collaboration space isn’t doing well. Holden Page did the lifting for us:

A successful workplace collaboration startup, one that helps teams communicate, share files, and manage workflows, can have significant impacts on how you do your job. However, despite their impact, venture funding for workplace collaboration tools is on the decline. That’s true even after accounting for the breakout success of category players such as SlackAsana, and Dropbox.

That downward trend is bucking the overall positive year venture capital is having. However, 2017’s tide of funding is apparently not enough to raise all sectors. Although, there is some chance the sector may redeem itself by the end of the year.

If you have to put the word “redeem” in your report about a trend, and it’s not the past tense, you could be in trouble. Here’s a chart to buck you up:

It’s 2017, And Women Still Aren’t Being Funded Equally

Our final key report this quarterly cycle dealt with women in the tech startup space. The news,  as we have seen in other recent quarters, wasn’t great.

Here are the report’s key findings (emphasis added by editorial):

Since 2015, Crunchbase has reported on gender diversity in venture capital. And, once again, the story for women looking to be funded remains stubbornly predictable. […]

For the first two quarters in 2017, startups with a female founder raised $332 million in seed investment or around 15 percent of seed funding dollars. Approximately $6.5 billion has been invested in female-founded companies, representing over 11 percent of dollars invested in the first two quarters of 2017.

At the seed stage, we reviewed 2,400 rounds for female-only founding teams and 37,000 rounds for male-only founding teams. Since 2010, for seed stage funding, women only teams have raised on average $82 for every $100 a male founded team raises. […]

For early-stage venture, we reviewed over 1,000 rounds for female only founding teams and 22,000 rounds for male only founding teams. For early-stage venture rounds, female founders fare worse than the seed stage, as women-only founding teams raise on average $77 for every $100 a male-only founded team raises.

To highlight the final gap mentioned, here’s the trendline over the past few years:

There’s still a lot of work to do in technology when it comes to diversity and fundraising.

Misc And Other

What else did we put out? Just two more articles:

  1. Every Chart And Table From The Global Q2 VC Report
  2. AI Excitement In Asia Grows, But It’s Not Enough To Beat US Funding Totals

And that, I think, is all of it. We’ll do it all over again when the third quarter comes to a close. If you have notes or complaints about the structure of how we do these recurring reports, send me a note. For now, that’s all we wrote!

Illustration: Li-Anne Dias

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