#189 VC Monitor Report Deep Dive (Q3'24) & Exit Predictions (DPI)
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Highlights: PitchBook-NVCA Venture Monitor (Q2 2024)
Every quarter, we highly recommend reading the PitchBook-NVCA Venture Monitor. In the report, they provide great market data on what’s going on in VC.
From there, we can take that data and make some predictions about the future! Here are some of our favorite highlights from the 50-page report (we pulled out the best insights so you don’t have to).
We’ll also share takeaways and predictions. Key bullets from the report:
The final exit value for Q3 was just $10.4 billion across 243 exit events
The number of VC-backed companies reached 57,674, a record high
$65.1 billion has been raised across 380 VC funds so far in 2024 – VC fundraising is on track to narrowly exceed 2023 level
Dry powder continues to grow, reaching $328.4 billion
Distributions remain low at 5% (vs capital calls of ~25%)
Number of VC Investors Down from 25k to 11k (and going lower)
On track for $175b in deal volume in 2024 (similar to 2020 pace)
There are now 57k VC-backed companies
Unicorns (co.’s @ >$1b valuation): 800 total, $2.5 trillion of value
VC Exit Predictions (DPI) & Industry Challenges
Venture capital limited partners continue to look for exits. The challenge is that the best companies don’t exit and the rest of the companies can’t make it happen.
From an earlier post: “Only 15 venture-backed technology companies went public in 2022 and 2023 combined. Big acquisitions like Visa’s purchase of Plaid and Adobe’s purchase of Figma were derailed by antitrust investigations.”
Q3 continued to see a lack of public listings:
Exits
In Q3, the exit scene remained lackluster, with $10.4 billion generated across 243 exit events
Predictions (DPI) Amidst Industry Challenges
So what does it all mean for Q4 and beyond? VC’s will continue to hope and pray for a few different factors to buoy their chances for exits:
Public markets need to remain robust. They are up YTD but need to continue to stay up for a healthy exit environment.
Interest rates need to keep coming down. The predictions are there for this to continue in late 2024 and 2025. Lower interest rates will help the VC exit environment as investors can no longer park their money in cash.
Positive US election outcome needed. That means different things to different people :).
If #1, #2, #3 come together, we believe DPI will hit 2020 levels ($250b) next year. LPs will demand this so VCs will continue to have to find ways to generate liquidity for their investors.
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