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Useful stats: Later-stage VC has a banner year, uncertainty about early stages

January 21, 2021
By: Jason Rittenberg

Deals raising at least $50 million grew by nearly one-quarter in 2020, driving an additional $18 billion in deal value to a new record of $156 billion invested. This data, from the PitchBook-NVCA Venture Monitor, suggests that the total venture capital market will see a slight decline in investment deals overall from 2020.[1] This slip in deal activity is driven by what is currently an 11 percent decline in seed or angel deals and a 20 percent decline in early venture capital deals.

This national trend held for many of the states in the country. Half of the states saw more money invested in 2020 than in 2019, with a 13 percent increase across the country in the year. Again, this investment volume occurred despite fewer deals in 2020 in all but 13 states. The states with more deals were Connecticut (+22 deals), Georgia (+3), Iowa (+13), Maine (+9), Massachusetts (+17), Michigan (+10), Missouri (+2), North Carolina (+18), Ohio (+4), Rhode Island (+4), West Virginia (+1), Wisconsin (+4) and Wyoming (+2).

California had about 500 fewer deals than in 2019, a sufficiently large drop to decrease its share of the nation’s deals by one percent to 34 percent. On the other hand, the state saw a $15 billion increase in investment amount, boosting the state’s share of all investment dollars to 52 percent (from 48 percent in 2019). This share of investment dollars was largely pulled from the other top 10 states, which saw their portion of venture capital dollars decline from 40 percent in 2019 to 36 percent in 2020.

 

[1] The current gap between 2020 and 2019 is 1,250 deals for a decline of about 10 percent. However, due to data collection issues, the number of deals reported by the VentureMonitor, particularly at the earliest stages, can rise significantly over time. More specifically, PitchBook continually updates its data and has been adding about 15 percent to its deal total over the following year, about 8 percent to the data from two years ago, 4 percent to the data three years ago, and about 1 percent for all earlier years (e.g., this year’s report includes an additional 59 deals that took place in 2006). PitchBook estimates the final 2020 count will be close to 12,254, a decline of just 30 deals from 2019, which is remarkably conservative, given this history.

venture capital, useful stats