Maryam Haque

by & filed under Exits, NVCA Blog, Research, Venture Investment.

 

We’re excited to release the 2016 NVCA Yearbook! While the thought of a “yearbook” may bring back painful memories of awkward high school photos, the NVCA Yearbook features statistics and insights on the entrepreneurial ecosystem, and further highlights the key role of industry data in quantifying the powerful economic force that is venture capital.

Fundraising, Investments, & Exits Amt. (chart)

Reflecting on 2015, the venture ecosystem recorded another milestone year. Fundraising and investment activity remained strong, with capital invested reaching its highest level since 2000 and the second highest level on record. The exit environment for venture-backed companies, on the other hand, was unable to maintain the pace from 2014 but was on par with the activity of 2013.

While the slowdown in venture-backed IPOs and the investments and valuations for unicorns grabbed all the headlines, this only tells part of the story. The NVCA Yearbook conveys a much deeper and wider analysis of the ecosystem that paints a more complete picture.

The slowdown in public market exits for venture investors coincided with an increased attention to maintaining and growing portfolios, a trend that is reflected in both the number of large deals completed and the high quality of new deal flow. For example, about 70 companies (mostly expansion stage or later stage) raised venture rounds of $100 million or more last year. These 70 companies, however, represented less than 2% of the overall 3,709 companies receiving venture funding in 2015. And, of those 3,709 Untitledcompanies, 1,444 received venture funding for the first time. Seed and early stage companies represented 51% of all deals and 36% of total capital invested.

California-domiciled venture capital firms continued to manage the largest proportion of capital (55%), and companies in California received the largest share of dollars deployed (57%) and deals (41%). Across the nation, entrepreneurs in 46 states and the District of Columbia and in 133 metropolitan statistical areas raised venture capital funding last year. This geographical spread lays the framework for a broader venture capital network and a richer entrepreneurial ecosystem across the country.

A healthy venture capital ecosys­tem necessitates balance, and 2015 in a sense brought some necessary recalibration. Nonetheless, the ecosystem remains robust, covering a vast range of stages, geographies, sectors, and players. Looking to 2016, savvy investors with capital to deploy remain in a prime position to fund the best opportunities and fuel startups across the United States.

Click here to view the 2016 NVCA Yearbook.