Venture capital (VC) has long been regarded as a high-risk, high-reward domain dominated by seasoned investors and industry veterans. However, in recent years, a noteworthy trend has emerged – the startup of first-time venture capital managers. These ambitious individuals, often armed with a unique perspective and fresh ideas, have been making waves in the traditionally exclusive world of venture capital. The question here is a simple one: How are the first-time VC managers doing? Here’s a look.

First-time Fundraising Activity

The following figure, from private equity and data provider Pitchbook, shows VC first-time fundraising activity. In 2013, Pitchbook reports $2.1 billion in capital raised across 77 funds. That figure fluctuated between $3.3 billion and $9.1 billion from 2014 through 2020. Then, in 2021, fundraising jumped to $14.7 billion across 318 funds. After the pandemic-driven rise, things went back to what some might call “normal.” In 2022 and 2023, fundraising was $7.3 billion and $6.5 billion, respectively, across 229 and 97 funds.

Raising a Second Fund

Given the interest in starting a VC fund, how are they doing in raising a second fund? The following has the answer according to data from Pitchbook. Overall, the answer is not particularly good in recent years. From 2013 to 2018, starting a second fund floated between 60% and 70%. Then, things went south. In 2019, the number of founders starting a second fund dropped to around 50%. In 2020, that figure dropped to below 50%. Things went lower still in 2022 and 2023, with the percentage of first-time managers raising a second fund dropping to 13.1% and 12.4%, respectively.

First-Time Mangers Bring New Perspectives and Innovation

One of the key reasons for the success of first-time managers in most any industry – venture capital included – is their ability to bring diverse perspectives and innovative thinking to the table. These individuals often come from varied backgrounds, bringing expertise from industries outside of traditional finance. The newcomers’ unconventional approach to investment decisions and risk assessment may improve returns for the industry as a whole, or then again, they may fail at such a task.

The real question one should be asking at this point is: Why? Why would first-time fund managers fail to raise a second fund? This question is more difficult to answer. Is it simply that new managers can’t beat the old guard? Is it that the nature of venture capital makes it difficult to raise money?


Overall, the decline in the number of first-time venture capital managers beginning second funds is, perhaps, a cause for concern for the investment landscape. Healthy industries invite the success of newcomers, even if it comes at the expense of the existing guardians of wealth. Time will tell whether the current trends will hold up in the coming years.


In recent years, the private equity (PE) and venture capital (VC) markets have held up relatively well. When interest rates began to rise in March 2022, some observers suggested that the PE and VC markets were in for a world of hurt. Although cracks have appeared through the past three years, the cracks have been nowhere near big enough to swallow the market. With that said, valuations are nowhere near their peak heading into the end of 2023’s first quarter. Here’s a review, according to private equity data provider Pitchbook’s 2023 Annual Valuations Report.

Median Early-Stage Valuation

The first look below is of the median early-stage valuation. The blue horizontal line represents the top decile (the top 10 percent). The orange dot represents the average. The yellow dot represents the median valuation. The blue bars represent the top and bottom quartile range. Overall, according to the median or average, valuations decline in 2022, from around $50 million (median) to around $25 million (median). For the average, the decline was less stark, dropping from around $120 million to around $80 million.

Median Early-Stage Deal Size

The next look is of the median early-stage deal size from 2013 through 2023. Overall, median deal size declined again in 2023 to around $15 million. Median deal size peaked in 2021 at almost $20 million. In 2022, median deal size was down only slightly compared to 2021. When measured by where deal sizes have been over the prior 10 years, the 17 percent year over year decline is less stark. In fact, if one were to draw a simple line from 2013 to 2023, the 2023 deal size value is still higher than what that line would predict, suggesting that, although deal sizes are becoming smaller, there’s still a healthy amount of gain built into the market compared to the pre-pandemic environment. The pandemic changed some things – some significantly – and early-stage valuations are one of them.

Median Step-Up Declines to a Decade Low

Lastly, the following figure is the median step-up from 2018 through 2023. Overall, the median step-up fell to a decade low in 2023 to around 1.5x. In contrast, the peak was reached in the first quarter of 2021 at an amazing 3.5x. The decline suggests some weakness in the viability of some early-stage valuations.

Summing Up

Overall, the private equity and venture capital markets continue to move through relatively challenging economic times. Although higher interest rates have put a damper on valuations, the industry continues moving forward with deals, and valuations – although down from their 2022 peaks – and still healthy relative to where valuations have been in the past 10 years. Time will tell what the docket holds in 2024 for early-stage investors.


In 2023, fintech venture capital (VC) came in at $34.6 billion. According to venture capital and private equity data provider Pitchbook, that represented a year-over-year decline of 43.8%. Interestingly given the common view that fintech his generally focused on the consumer, about 72% of the total fintech VC dollars went to business-to-business applications, a sharp rise from the 41% in 2019. Here’s a review of some other things happening with fintech investing.

The Quarterly View

The first view is the quarterly view by sector. In light blue is retail deal value. In dark blue is enterprise deal value. In light purple is Stripe deal value. And the dark line represents total deal count.

Interestingly, and perhaps disappointingly if you’re a fintech startup, total deal activity towards the fintech space peaked two years ago at almost 1,000 deals. Since then, deal count has precipitously declined to just over 400 through the third quarter of 2023.

In terms of deal value, this measure peaked in the third quarter of 2021at just over $25 billion in that quarter. Fast forward to the most recent figures, and deal value in the third quarter of 2023 was at around $6 billion. Money is getting tighter, and certainly getting tougher for financial innovators.

Where were the biggest deals?

Given this background, where were the biggest deals in 2023? The following table from Pitchbook has that look by quarter. The largest deal was Stripe. Stripe closed on March 15, 2023, with a deal value of $6.9 billion at a post-money valuation of a whopping $43 billion . The late-stage VC investment in the Payments sector was led by Andreessen Horowitz and GIC.

The second largest fintech deal in 2023 was Generate for $1.1 billion. Interestingly for curious observers, the post-money valuation was not disclosed.

Rounding out the top three was Abound at $602 million. The alternative lending platform did not release its post-money valuation after the massive draw from GSR Ventures, Hambro Perks, and K3 Ventures.

Fintech VC Exits

The last view here is fintech VC exits by sector by year. Unsurprisingly, 2021 was an amazing year for fintech VC activity. In 2023, retail and enterprise exit value has come to a standstill, with very little exit activity happening. Interestingly, although exit activity when measured in dollars is quite low, total exit count is still in the 175 range, above where it stood in any year except for 2021 and 2022. Interesting!

Summing Up

Overall, fintech activity continues to slow from its astronomical 2021 levels. If you talk to someone on the street, there certainly continues to be interest, although it’s hard to see that interest in the money.


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