It’s Election Week, and things are slow in the world of U.S. startup funding, IPOs and M&A.
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There’s a lot of stress around this particular election. And while venture and startup circles tend to skew Democrat, the party favored to win the presidency, no one wants to be too trusting of the polls. Worries around vote-counting and potential post-election legal challenges also remain paramount.
Concerns around the election look to be a factor in the quiet outlook. There’s nothing on the U.S. IPO calendar for this week, per Renaissance Capital. Last week, by contrast, there were 11 deals, and five the week before that.
Funding announcements are also way down. Just one U.S. venture funding announcement of $1 million or more that made it into the Crunchbase dataset Monday, as of midday: Stensul, an email creation platform, raised $16 million. The prior Monday, 11 startups announced funding rounds, collectively bringing in nearly $250 million.
Election Day, meanwhile, portends to be awfully quiet, too–at least for funding news. This is unusual because Tuesdays are known as the favored weekday for companies to publicize new venture funding rounds.
At Crunchbase News, my co-workers are known for working extra hard in the run-up to Tuesday morning, as startup founders commonly do interviews in advance of their planned funding announcements. This week, however, colleagues report their inboxes are uncharacteristically sparse.
This doesn’t mean financing has petered out. Some startups that have funding wrapped up have decided to delay announcements. They plan to put it off until their target audience has the attention span to focus on news about something besides the election.
If record early-voter turnout and obsessive news consumption are any indication, this is a more momentous election than usual for American voters. So, we might expect a more momentous-than-usual slowdown in startup funding news.
To see if this is indeed the case, we took a look at funding activity during prior election weeks. We wanted to find out if they had the same slow pace of startup funding and IPO activity.
They did not.
Take the Midterm Election of 2018. During the first two days of that election week, Nov. 6 and 7, a total of 40 U.S. companies announced seed or venture funding rounds of $1 million or more, collectively raising over $550 million.
We compare funding activity over the past several election weeks in the chart below.
Of course, we don’t have data for the full week for the current election. But because the IPO calendar is set in advance, we shouldn’t see any changes there this week. As for funding announcements, we know everyone is sick of forecasts, but here’s one anyway: Expect the rest of this week to be atypically sluggish for new rounds.
Illustration: Dom Guzman