Seed and initial financing deals dive in Q2

The PitchBook-NVCA Venture Monitor Q2 2020 shows that COVID-19 is having an impact on the earliest parts of the venture capital funnel. By extrapolating the first half data through the rest of 2020, initial investments are on pace for a 26 percent decline from 2019, and the fewest total deals since 2010. Continuing this same extrapolation, seed investments are on track for a 36 percent decline in 2020 from 2019 and also the lowest level in at least seven years. Meanwhile, angel investments are on track to finish the year comparably to last year, and late-stage VC investments are on pace for a stronger year than 2019.

COVID also appears to be helping the most established VC markets at the expense of the rest of the country, despite the pandemic’s early impacts in those regions. The West Coast and New England (but even more specifically, the Bay Area and Boston) have increased their shares of the nation’s VC dollars during Q2, relative to last year. The rest of the country has seen its share of VC dollars in the second quarter decline from 37 percent in 2019 to 26 percent in Q2 2020 (with much of this investment occurring in New York City).