PitchBook News - Down rounds are way up

Value creation between rounds has also been heavily impacted, meaning GPs will have a tougher time raising their next fund. Median velocity of value creation (VVC) and relative velocity of value creation (RVVC) figures have fallen rapidly across the ecosystem, including a 99% YoY VVC reduction at the venture-growth stage.

The turmoil within venture is especially concerning for nontraditional investors, who were the first to pull away from VC when the economy started to tilt downward, and as expected, many have remained on the sidelines.

During the first half of this year, only $62.9 billion of US VC deal value involved a nontraditional investor—roughly half the $122.4 billion observed in the first half of 2022.

As we've noted in the past, the absence of these investors is especially concerning given the amount of capital they've poured into the VC ecosystem in recent years; without their return, it is unlikely that venture will reach the highs of 2021 in the near future.

Without a doubt, the remainder of 2023 will be challenging for most founders, investors, and other VC participants. But is the worst of it behind us or has it yet to come?

Until we know what the future holds, you can get more data and analysis in our Q2 US VC Valuations Report.