Deal Volume is DOWN While Invested Capital is UP
Declining deal volume may at first appear to be cause for concern, however
deeper analysis shows that deal volume is entering a subdued plateau while
invested capital is on the rise. Both are indicators of a return to a healthier and
more rational investment environment. The first three quarters of 2017 saw
7,558 venture-backed companies raise nearly $90 billion in funding globally.
2017 invested capital is on pace to exceed the total $134 billion invested in 2016.
However, 2017 deal volume is expected to fall short of the 9,717 deals completed
in 2016.
2
These two factors are an indicator that investors are not pulling back
from the market – but that they are being more selective on deals in which they
invest.
Deal volume continues to decrease back to reasonable levels while invested capital is on the rise.
Note: graph shows US Deals only
Sources: "Venture Monitor 3Q 2017." Pitchbook and National Venture Capital Association, 28 Sept. 2017, page 4.
Figure 2 Deal Volume and Invested Capital Trends
PitchBook-NVCA Venture Monitor
*As of 9/30/2017
$37.0
$26.7
$31.6
$44.1
$41.2
$45.2
$69.6
$79.2
$71.8
$61.4
4,696 4,458
5,381
6,734
7,872
9,226
10,444 10,432
8,637
5,948
Deal Value ($B)
# of Deals Closed
2
"Prequin Quarterly Update: Private Equity & Venture Capital Q3 2017." Prequin, Sept. 2017, page 14.
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