VC funding takes a nosedive in Q1 for 7th straight quarter | NVCA
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The first quarter of 2023 was bleak for the venture capital and startup sectors, as late-stage deal value declined for the seventh straight quarter to just $11.6 billion and exits collapsed altogether, according to the latest report by the National Venture Capital Association and Pitchbook.
Silicon Valley Bank’s collapse was a major, unexpected event that dominated the narrative in March, and the impact of the bank’s failure sent shockwaves as it was at the center of the innovation ecosystem, as it usually supplied bridge loans for startups raising money.
While the impact of the bank’s failure will likely not be immediately visible in the data, and the potential devastation from the event seems to have been largely avoided, it was another unneeded pressure on the market, said Vincent Harrison, an analyst at Pitchbook, in an interview with VentureBeat.
“The first quarter of the year met expectations in terms of following the downward trajectory that we saw in Q4,” Harrison said. “In Q4 2022, we started to see things go down. The expectation for the most part was that things would continue to go down and that pretty much held up. Whether it is fundraising or deal activity or exit activity, everything continued the trend downward.”
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He added, “I think everything that happened this quarter meant things were going to be down regardless of what happened with SVB. But again, SVB just exasperated the problems. It just scared a lot of
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