Some Thoughts on 2018 Results Heading with 10 Months Left in 2019

We’re a couple months into 2019, which means we are just now starting to get final 2018 figures. 

Let’s see how well you know what the 2018 venture capital landscape looked like.

First Question: How much did U.S.-based venture capital-backed companies raise in 2018?

U.S.-based companies raised an astonishing $99.5 billion this past year.  Will 2019 beat this?  It is, of course, anyone’s guess.

Second Question: Was 2018 better than 2013 through 2017?

With a massive 2018 funding raise of almost $100 billion, was this better than what we saw in 2013 through 2017? 

Here’s that look.  Interestingly, the $100 billion raised last year was a large jump from 2017’s $76.4.  The $100 billion was much larger than 2016’s $64 billion, 2015’s $78 billion, 2014’s $61 billion, and 2013’s $36 billion.

What about the number of deals?  How does 2018 compared to what we’ve seen in the prior 5 years? 

As with deal volume, this past year’s deal volume was quite healthy.  Interestingly, though, 2018 was not tops.  In 2018, the venture capital made 5,536 deals, a slight decline from 2017’s 5,824.  This past year’s deal volume was also lower than 2016’s 5,679, 2015’s 6,098, and 2014’s 5,998.  The only year the number of deals were lower was back in 2013, when the deal count was 5,176.  Very interesting that the number of deals are down, but deal volume is up massively. Hmm.

Third Question: What about U.S. deal share by stage?  Which stage won in 2018?

It’s always worth looking at what stage in the investment cycle venture capital companies are investing in.

Make your guess before looking -which stage do you think had the highest percentage of venture capital share in 2018?  Seed stage, early stage, expansion stage, later stage, or other? 

Here’s the result according to PriceWaterCooper’s MoneyTree report. 

Interestingly, in 2018 25% of all deals went to “Seed Stage” stage companies and 25%  of all deals went to “Early Stage” companies.  These two came out on top.

In third place was the “Expansion Stage” at 23%, followed by “Later Stage” at 10% and “Other” stages at 17%.

The 25% share taken by early stage companies was the lowest we’ve seen since at least 2013.  In 2013, early stage companies attracted 36% of all venture capital investments.  The 2014, 2015, 2016, and 2017 figures were 35%, 35%, 34%, and 31%, respectively. 

Is it an ominous sign that venture capital investors are shifting their attention to earlier stage companies?  Hmm.

Conclusion

Overall, the venture capital industry was in good shape to end 2018.  All signs so far for 2019 also look healthy.  It’s a good time to be an entrepreneur and an investor in a privately-held company, at least theoretically.