SEATTLE – January 10, 2019 – By the end of 2018, the venture industry deployed $130.9 billion in US-based startups, surpassing the all-time high in 2000 and illustrating the maturation of the VC ecosystem, according to the PitchBook-NVCA Venture Monitor. The quarterly report is the authoritative source on venture capital activity in the US entrepreneurial ecosystem and is jointly produced by PitchBook and the National Venture Capital Associate (NVCA). With $75.7 billion in VC dry powder, investors funneled capital into the startup ecosystem at a record pace in 2018, boosting deal sizes across the entire VC spectrum. Mega-deals continued to dominate the dealmaking environment, increasing in count by 91.3% over 2017. The strength of dealmaking over the last several years led to a strong exit market in 2018 with elevated exit sizes driving total value to $122.0 billion. IPOs returned greater than 50% of exit value for the second straight year as IPOs and buyouts continued to scrape away at M&A’s lead as a proportion of exit count and value. Similar to the record dealmaking environment, 2018 was also a banner year for venture fundraising as VCs raised over $55.5 billion across 256 vehicles, the highest total capital raised recorded. Read more
WASHINGTON, DC – The National Venture Capital Association (NVCA) was delighted to see continued progress on net operating loss (NOL) reform with the inclusion of the “American Innovation Act of 2018” in the end-of-year tax package, which will be voted on in the House of Representatives tomorrow. The bill includes a proposal sponsored by Rep. Erik Paulsen (R-MN) to protect the NOLs of startups by allowing them to carry forward their losses and R&D tax credits accrued in the first three years of the start of a company’s active trade or business without regard to Section 382 of the tax code, which currently can create an unintentional tax penalty for startups. Read more
WASHINGTON, DC – The National Venture Capital Association (NVCA) announced today that Mike Maher, formerly CFO at U.S. Venture Partners (USVP), is the 2018 recipient of the NVCA Industry Impact Award. The Industry Impact Award is dedicated to recognizing CFO, operations, and compliance professionals at venture firms who have provided an exceptional public service to the VC industry through the dedication of their expertise, resources, and commitment to the NVCA CFO Task Force. Read more
WASHINGTON, DC – The National Venture Capital Association (NVCA) recommended key changes to the Volcker Rule in a proposal submitted yesterday in response to multiple federal agencies’ request for comment regarding the “covered fund” definition under the Volcker Rule. NVCA’s letter outlines the harmful consequences that the broad scope of the covered fund provision has had on the startup ecosystem. Read more
Mega-Funds Fuel Strong Dealmaking, Particularly in Late Stage Startups and Unicorns as Investors Compete Fiercely for Deals; Several Outsized Exits Drove Exit Value & Provided Much-Needed Liquidity
SEATTLE, WA – October 9, 2018 – In the third quarter of 2018, investment into US venture capital-backed companies topped $27.8 billion, pushing 2018’s total venture capital (VC) deal value to $84.3 billion. At this pace, 2018 could hold the mark for most venture capital invested in the US in a single year, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on venture capital activity in the entrepreneurial ecosystem jointly produced by PitchBook and the National Venture Capital Association (NVCA). Findings reveal 2018 median VC deal sizes experienced double-digit percentage growth across all stages compared to 2017, the highest jump since 2015. The steady increase in deal sizes can be attributed to the growing number of mega-funds raised, as investors increasingly view larger vehicles as a competitive advantage to invest in high-quality startups. This can be seen by the growing proportion of venture investment in the late stage, which made up nearly 23% of total VC deal count, the highest percentage since 2011. Additionally, the VC exit market has shown signs of strength, with $20.9 billion exited across 182 deals in 3Q, bringing the yearly total to $80.4 billion. Sustained dealmaking in the later stage of the VC market is expected to drive more outsized exits for the duration of this market cycle, suppressing investor concerns over liquidity. Read more
WASHINGTON, DC – The National Venture Capital Association (NVCA) today announced the appointment of Cassie Ann Hodges as Director of Communications effective immediately. Hodges comes to NVCA from the United Nations Foundation, where she served as Officer of Communications.
“I am very excited to welcome Cassie Ann to the NVCA team. Her diverse background in global and domestic strategic communications and stakeholder outreach will be a major asset to NVCA,” said Bobby Franklin, NVCA President and CEO. “Her deep expertise with entrepreneurial, membership and advocacy communications will be critical to NVCA as we continue our ongoing efforts to better serve the venture community, startups and entrepreneurs. We are thrilled to add someone as dedicated and dynamic as Cassie Ann to push our communications efforts to new heights.” Read more
WASHINGTON, DC – The National Venture Capital Association (NVCA) was excited to see continued progress on net operating loss (NOL) reform with passage of the “American Innovation Act of 2018” in the House of Representatives. H.R. 6756 passed by a vote of 260-156. The bill includes a proposal to protect the NOLs of startups by allowing startups to carry forward their losses and R&D tax credits accrued in the company’s first three years without regard to Section 382 of the tax code, which currently can create an unintentional tax penalty for startups. Read more
WASHINGTON, DC – The National Venture Capital Association (NVCA) was pleased to see that the “American Innovation Act of 2018” includes a proposal to protect the net operating losses (NOLs) of startups. The proposal would allow startups to carry forward their losses and R&D tax credits accrued in the company’s first three years of existence without regard to Section 382 of the tax code, which currently can create an unintentional tax penalty for startups. Startups often accumulate NOLs when using investment capital to try and build a successful company. These NOLs most often are related to research and development and hiring, activities that public policy separately seeks to encourage. However, the Section 382 rules often do not allow startups to carry forward their NOLs, essentially penalizing startups for investing in innovation since they serve as assets on a company’s balance sheet. Read more
WASHINGTON, DC – The National Venture Capital Association (NVCA) applauds today’s passage of the JOBS and Investor Confidence Act of 2018 in the U.S. House of Representatives by an overwhelming bipartisan vote of 406-4. The bill includes a number of provisions that will support capital formation for U.S. growth companies. These pro-innovation provisions include relief for many venture capital firms from having to become Registered Investment Advisors (RIAs), a designation that was not intended for VC firms and which adds a number of costs and challenges for VC firms. Even firms that do not have to register often need to manage their portfolio and limit or refrain from certain investments to avoid the regulatory morass of registration. Read more
The DEAL Act Would Improve Access to Capital for U.S. Startups
WASHINGTON, DC – The National Venture Capital Association (NVCA) was pleased to see that today the U.S. House Committee on Financial Services passed the Developing and Empowering our Aspiring Leaders (DEAL) Act by a voice vote. Sponsored by Representative Trey Hollingsworth (R-IN), the DEAL Act will encourage capital formation for startups by directing the Securities and Exchange Commission (SEC) to make a percentage of secondary investments qualifying for purposes of the definition of a venture capital (VC) fund. The modification would be limited in scope to equity investment by venture capital funds, activity that is generally a bipartisan priority. This bill would improve the ability of VC funds to continue to follow their portfolio companies along their growth path through more follow-on investments without fear of triggering a significant regulatory burden. Read more
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