National VC investment over the past five years has seen significant swings, first driven by pandemic impacts and rebounds, then by the rocket ride of AI. According to PitchBook data, national VC activity below $100 million declined from nearly 10,500 deals in 2020 to just under 8,200 in 2025, a 22% drop. Over the same period, the total capital invested increased by just over $5 billion (6%). The trend of more funding into fewer deals is highlighted by the median deal size more than doubling to over $4 million (Fig 1). These macro trends are important as they set the stage for what is happening at the state level.
Figure 1. National angel and VC deal metrics for rounds less than $100 million by year, 2020 – 2025.
With the national trends dominated by a few select markets, a closer look at individual states highlights data more relevant to many TBED practitioners and policymakers across the country. Importantly, this analysis does not rank states, but is intended to identify trends that might point to policies or economic drivers influencing outcomes.
Deal count is an important metric for determining trends relevant to TBED because it captures the opportunity set created by the number of companies accessing capital and is somewhat decoupled from industry mix, company maturity, and capital need. Similar to national trends, most states had declining deal counts over the past six years. Just six states increased deal count from 2020 to 2025 with a collective increase of 189 deals (Figure 2).
Figure 2. Annual count of angel and VC deals by state for rounds less than $100 million. States in orange indicate an increase in deal count from 2020 to 2025
A closer look reveals that Delaware is responsible for the vast majority of the increase, though data limitations related to Delaware-registered businesses without an identified physical headquarters location obscure the analysis somewhat. The collective increase without Delaware drops to 40 deals. Nebraska stands out through both its 100% growth from 2020 to 2025, and the less significant drop in activity after the peak in 2022.
With so many states tracking national trends, state share of national deals may be a better indicator of how local markets are faring. Twenty states increased their share of national deals from 2020 to 2025 (Figure 3). It is important to note, however, that many of the changes, both positive and negative, are relatively small. Importantly, California and New York are capturing larger shares of national deal activity and together represent over half of all deals, indicating that many other states may need to expand support for startups or risk losing opportunities to the leading investment hubs.
Figure 3. Annual share of national angel and VC deal count by state for rounds less than $100 million. States in orange indicate an increase in share of deal count from 2020 to 2025
While many states show bright spots, the deal-related trends in Nebraska stand out. Looking deeper into the data, the Venture Development Organization (VDO) Invest Nebraska is the most active investor in the state over the past six years. Other investors in the top ten in Nebraska are all local except for two: a national accelerator with a dedicated in-state program presence and a fund out of San Francisco. Consistent engagement from mission-driven investors, public support for startups, and activation of local capital may be important drivers to Nebraska’s upward trend.
While VC trends nationally indicate decreasing investor interest in smaller deals, early-stage companies and those simply not seeking multi-billion-dollar transactions are important sources of growth at the local, state, and national level. States bucking the national trends may offer insights for economic development leaders committed to supporting innovation-driven economic growth. While program design and implementation are important ingredients, it is also important to rally the political imagination and to build broad bases of support for promising companies looking to compete on the global stage.
Do these trends resonate with your experience at the state or local level, or do you have a different perspective? Do you have insight into the nuances of policies, people, programs, and relationships driving the activities behind the numbers? If so, please reach out to Aaron Hagar and share your perspective. Also, consider joining our TBED Community of Practice to share your experience and perspective supporting early-stage companies with peers across the country.
This page was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.