Our cycle of quarterly coverage of all things venture capital is at an end, which means that I have the high pleasure of recapping dozens of charts and thousands of words into something short and digestible.
Quickly, a small note about upcoming changes: We are hoping to deprecate our “Technology Growth” category in the next round of reports (when Q4 ends) as the metric has lost its way in the Softbank era. We’re also working on a charting UI update that looks awesome as heck.
That aside, let’s begin.
Our Q3 global report was our most comprehensive to date. It is packed with more charts than I want to recall fact-checking.
Happily, projections paint an impressively rosy picture of the global venture market, which, by our numbers, is at its highest mark since the Dot-com boom.
According to Crunchbase’s projections, both deal and dollar volume are at record highs since the Dot-Com bubble. Q3 2017 surpasses previous highs reached in Q1 2016, a quarter that was followed by a number of sequential down quarters.
The good times, if they ever really left, are back and nearly bigger than ever before. This is what an upgrade looks like:
The domestic market was a bit rougher in terms of exits in the third quarter, but there were positive signs all around.
In fact, late-stage venture investment hit its “highest level in five quarters by both round count and total dollars invested” in the third quarter. For early-stage investors looking for markups, that must be welcome.
But funding amounts were dicier amidst the early stages, and there was some slack among exits:
U.S. startup investors were good at putting capital to work this past quarter. They weren’t as good at getting it back.
Those are two standout trends for the venture investment landscape in the domestic third quarter of 2017, according to reported and projected data from Crunchbase. Data shows a rise in late-stage funding and a stabilizing early-stage funding environment. Acquisitions and IPO activity, by comparison, were lackluster.
The US VC market is a critical player in the global VC market, but the two aren’t the same thing. What will be noticeable when the current bull cycle fades is which takes the downturn more steeply. We’ll be watching.
Women In Venture Update
As a follow-up to the 2016 women in venture report, Crunchbase’s Gené Teare wrote “The 2017 Update To The Crunchbase Women In Venture Report.”
The data is super interesting. Cribbing verbatim, here are the three points that stood out the most during my reads:
Women now hold 15 percent of the partner roles at accelerators and corporate venture firms, a 25 percent improvement in 18 months.
Women founded 16 micro-venture funds in the last three years, 21 percent of all the new firms in that category.
Among the top 100 venture firms, the percentage of women partners edged up to 8 percent from 7 percent, an increase of 17 percent.
US vs. The World: Early-Stage Funding Showdown
A new entrant into our quarterly mix, the News team tracked the percent of funding in dollar-terms that domestic startups versus international startups raised, on a per-quarter interval.
We went to the third quarter of 2016, and the chart isn’t exactly great for the US market. The US is losing primacy to the rest of the world in terms of early-stage dollars, but that comes with the following caveat:
First, the most-recent-quarter was not a local maximum for U.S. early-stage fundraising. The first quarter shown above, Q3’2016, was more active in terms of dollars.
However, the most-recent-quarter’s global tally is a local maximum, coming in at the highest dollar amount for the quarters charted above. So the declines are not driven by shared directional shifts, of which the world is getting the better cut. Instead, the U.S. is moving independent of the global early-stage market.
So the following chart is perhaps a bit exaggerated by bad luck more than anything else. Here’s the data:
One country controlling over 40 percent of early-stage dollars is still a lot. But it’s also a lot less than 55 percent.
Everything Is Smaller In Texas
Forging ahead, we went back to Texas this quarter to get a look at the state following Q2 2017. The short tally: what goes up must come down.
How far the fallen? From the piece:
Venture capitalists put $268.2 million into Texas startups across 38 known deals in the third quarter of 2017. In perspective, that is less than what was invested in all of Austin alone during the second quarter.
One reason that we look at these results each and every quarter is that any particular number can gyrate outside of its trend. But with historical data behind us, we can mentally correct for outlying periods.
To frame the slack in Texas’s quarter, here’s the state’s data going back to 2012:
What does it all mean? Probably that we are about seventeen dozen quarters into a massive run in the public markets and nothing can run forever without taking a break.
AI Investment In Focus
Investing in AI-focused companies hit a local-maximum dollar high, but a local-minimum round low in the third quarter.
It’s an odd result that looks like this in chart form:
What will be interesting to see over the next few quarters will be whether the round rounds will keep falling while the money keeps printing.
We did our roundup of all global charts:
We did a new roundup of all US charts:
Current Status of Crunchbase News
Or something close to it. Thanks to you all for reading and sharing the above-listed work. It means a lot to our little crew.
We’ll be back with more when the quarter ends. Until then, stay up with us on Twitter.