As we approach the end of a surprisingly resilient year, we think it’s a good idea to look at where we’ve been and where we stand on the venture capital (VC) front. Here’s that look in four charts, according to private equity data provider Pitchbook.

Median US VC Seed Pre-Money Valuations

The first look below is of the median VC seed pre-money valuations for the U.S. Interestingly, the upward trend in pre-money valuations has moved up to $12 million in the third quarter, up from the $11.2 million in the second quarter. Median pre-money, seed valuations ended 2022 at $12 million and ended the first quarter of 2023 at $12 million. Overall, when judged by this valuation measure, VC pre-money valuations are doing just fine, much better than what some predicted heading into 2023.

Median U.S. VC Early- and Late-Stage Pre-Money Valuations

The following figure looks at the median U.S. VC early- and late-stage pre-money valuations. Interestingly, by this measure, late-stage companies’ valuations peaked in the third quarter of 2021 at $80 million. Early-stage companies’ valuations peaked in the first quarter of 2022 at $55 million. Perhaps most interesting from this view is that late-stage valuations have started to rise, up to $63 million from the 2023 first quarter’s value of $47 million. In contrast, early-stage valuations have been persistently flat since the third quarter of 2022.

Median U.S. VC Years Between Rounds by State

The third view is median U.S. VC years between rounds by stage. As one might expect, the median years between rounds has been flat since 2021 for late-stage companies, while the years between rounds jumped for venture growth companies to 1.5 years in 2023 from 1.3 years in 2022.

Median U.S. VC Valuation Step-Up at Exit by Type

Our fourth look is of the median U.S. VC valuation step-at at exit by type. For the first time, the public listing step-up at exit equaled the acquisition step-up in 2023. This was due to a much stronger decline in the acquisition step-up from 2022 to 2023 (going from 1.7x to 1.1x) compared to the smaller drop for public listing (going from 1.2x to 1.1). Although we have never seen public listing surpass acquisition step-up, it’s conceivably possible that in 2024, we could see just that.

Summing Up

Overall, the VC world has withstood the potential for deep weakness. Instead of declining precipitously in an economy that was supposed to weaken, the economy – and venture capital valuations – have held up quite well. What the 2024 horizon holds remains on the debating docket, but as of now, the VC world is doing just fine, much better than what many observers thought would be the case heading into 2023.


Of all the financial information released this past week around the world, perhaps the most important was the state of the U.S. labor market. Although still growing, the picture is getting weaker. Here’s a view of the American labor market in five charts.

Labor Force Participation Rate

The first view is the U.S. Labor Force Participation Rate (LFPR). The LFPR ticked down in October, to 62.7% from 62.8%. Interestingly, interest in working is still below its pre-pandemic peak of 63.3% and well below its all-time peak of 67.3% in early 2000.

For some reason, there’s less interest in working. Demographic shifts explain part of the downward drift. Lackluster job prospects certainly explains part of the drift, but certainly there’s something deeper going on here.

Job Growth is Still Strong

The second picture of the American jobs market is year-over-year growth in jobs. Job growth, at 1.9% year-over-year, is still healthy and growing faster than population growth (1.4%). With that said, growth is coming down quickly. Of course, a bullish take on the jobs market might suggest that at the current pace of deceleration, the American economy is more than 18 months from job losses. Healthy, very healthy.

The Unemployment Rate Continues to Rise

The third view is the Unemployment Rate and its 12-month moving average. As an ominous sign, the actual unemployment rate has been floating above its 12-month moving average since August. This typically occurs just prior to a recession signal. Just a word of caution.

The Older Generation Continues to Be a Force in the Labor Force

The fourth view is employment by age group. Before looking, of these age groups, which do you think would be the largest demographic in the labor force: 25 to 34, 35-44, 45-54, or 55 and over?

Fascinatingly, and this is only recently, the largest demographic group in the labor force are individuals aged 55 and over at around 38 million. Not far behind in second place are the 25 to 34 year olds at 35.9 million. Third place are the 35 to 44 year olds at 35.6 million. And rounding out the demographic groups are the 45 to 54 year olds at about 32 million.

By Industry

The fifth view is by industry. Interestingly, although somewhat sad, the fastest growing sector in 2023 has been State Government at 3.81%. Not far behind have been Education & Health Services at 3.48% and Federal Government at 2.68%.

On the other end, the Information sector continues to lose jobs (-2.98%) as does the Manufacturing sector (-0.11%).

Summing Up

Overall, the American labor market continue to chug along, albeit at a slower pace that suggests hiring is slowing significantly. Whether this indicates a pending recession is yet to be seen (of course), but the direction is heading towards such a situation.


One of the hottest terms in the investing world today is generative artificial intelligence, sometimes shortened as Gen AI. Given the interest from the VC and PE world, here’s a look at private equity data provider Pitchbook’s take on the state of Gen AI investing.

The Overall Picture

The following figure has an overall look at the Gen AI picture from the first quarter of 2020 through the third quarter of 2023. The figure is short because Gen AI doesn’t have a long history of investor interest. As insiders well know, we’ve only recently had the computing power to bring many forms of Gen AI to the consumer.

Overall, on the number of deals, VC investment in Gen AI ticked down in the third quarter of this year to 101 deals. The number of deals, according to Pitchbook, peaked in the second quarter at 142, which was a marked rise from the first quarter deal count of 81. The number of deals has generally trended up over the past three years, going from 70 in the first quarter of 2020 to the most recent estimate of 101.

(As a note, some observers have found it somewhat odd that deal counts have not grown faster. The answer to this “curiosity” is that Gen AI deals tend to be focused on few companies because the amount of data needed to really perform Gen AI is massive, and as such, requires significant investment in the infrastructure to make the consumer facing component of Gen AI work.)

Deal Value

Shifting to the deal value, the total estimated deal value reached $6.1 billion in the third quarter of this year, a marked rise from the $4.4 billion in the second quarter. The only quarter to have seen stronger deal value was the first quarter of 2023, which saw deal value explode to $11 billion. Of course, one company was responsible for the massive jump – OpenAI. In the first quarter, OpenAI garnered $10 billion in support from mostly large investors (including corporate investing arms).

Prior to the incredible strong dollar figures of 2023, the previous peak in deal value occurred in the third quarter of 2021 at $2.8 billion. This seems quite small compared to the 2023 values, but one must remember that two companies accounted for the first and third quarter jumps in deal values – the previously-mentioned OpenAI and Amazon-backed Anthropic ($4 billion).

Summing Up

Overall, although generative AI dealmaking slowed in the third quarter of this year, venture capital interest in the sector continues to trend upwards. Time will tell whether the hype surrounding generative AI is worth an investment. The evidence up to this point suggests the answer is yes, but so has been the answer for past technological booms in specific sectors that eventually turned south.


A Snapshot of Global Markets

October 10, 2023

A Snapshot of Global Markets Economic conditions have generally turned out better than what most economists had expected heading into 2023. As we enter the last quarter of the year, what does the global private equity market look like? Here’s a look, according to a recent note out of private equity data provider Pitchbook. Add-ons […]

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How is the Global Pre-Seed World Doing?

September 25, 2023

How is the Global Pre-Seed World Doing? According to some, investment in the pre-seed world is a harbinger of things to come. In this vein, private equity data provider Pitchbook recently released an interesting new dataset on the pre-seed investing world. Here’s a look. The Global Picture The first view is that of the global […]

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Who are the Top 10 Buyout Families?

September 12, 2023

Who are the Top 10 Buyout Families? Every now and then, private equity data provider Pitchbook puts out an interesting take on who they view are the top buyout groups. Although it is not the final say on which buyout groups are in the top 10, it usually offers some interesting insight into an “insiders” […]

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In the Private Equity World – Does Past Performance Predict Future Returns?

August 29, 2023

Every potential investor in private equity funds has the question: Does the past performance of private equity (PE) funds predict future performance? According to a recent research note out of PE research firm Pitchbook, the answer to that question is probably, but it depends. Here’s a review. Some Background As background, the following is a […]

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Surprisingly, Valuations are Holding Up

August 15, 2023

Every quarter, private equity and venture capital data provider Pitchbook releases their accounting of the state of the venture capital and private equity markets. The recently released second quarter valuations picture offered some surprising glimpses. Here’s a look. Angel and seed valuations The first look below is of angel and seed valuations. The figure on […]

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What’s On Tap for Mergers and Acquisitions in 2024?

August 1, 2023

Activity in the Mergers and Acquisition (M&A) world has been relatively subdued through the first half of 2023. As shown below, M&A deal value activity stood at $1.8 trillion through June 30, 2023. That value occurred across 20,599 M&A deals. For the entire 2022 year, total deal value reached $4.5 trillion across 41,808 deals, suggesting […]

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Exit Values Jump Again and Other Updates on PE

July 18, 2023

The past year has been just okay for the private equity world. Deals and fundraising continued, albeit at slower paces than in 2021 and 2022, but nonstop concerns about the health the economy continued to dog private equity activity. There are bright spots, though. Here’s a review of where private equity (PE) stands as of […]

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