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It’s no secret that the venture capital industry is facing a liquidity crunch, with IPOs and other exits remaining few and far between after a record-breaking 2020 and 2021. Now, we have numbers that show how bad things are.
In 2023, the US venture capital industry invested $60 billion more in startups than it raised in returns, according to Wall Street JournalCiting PitchBook data. This is the largest deficit recorded in PitchBook data over 26 years. The data also found that US venture capital firms returned only $26 billion worth of equity to their investors in 2023, the lowest total since 2011.
Despite the void in exits, the past three years have recorded the highest annual total of venture funding in the industry’s history.
There are signs that the checkout market may start to open up next year – companies like Klarna and… ServiceTitan Both have IPOs in the pipeline – which could help start reducing that deficit.
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