We received a great presentation from the NVCA that reviewed the venture capital market in 2018. One of my favorite slides along with commentary is below.
Fund Size. Fund sizes for non-coastal VC have increased slightly to $25mm, although this figure is in line with 2013. Fund size on the coasts however has exploded to $82mm. This means startups in CA, NY, and MA will continue to receive far more capital and attention than those in the Midwest and South.
Deal Size. Seed and Series A deals have climbed steadily and consistently in size, angel deals remain flat, and later stage deals ticked up this year after 4 years of relative flatness. We’re not surprised to see the average angel deal stay stagnant at $700k – angel investing is the worst risk/reward and we don’t know anyone who does it well. Seed and Series A trending steadily upwards is an indication of the ability of founders to attract more capital at these stages because there is more competition in early stage, thus driving deal size up. As for late stage, we’ll wait to see next year’s data before commenting on a one year uptick in deal size.
Exit Size. This part of the slide is by far the most interesting. It’s incredible to us to see that private equity firms seem to be doing larger acquisitions than strategics for two years in a row. If you decide to sell your company, make sure to approach as many private equity firms as you can as they will generally match if not beat the premiums paid by strategics in this environment.
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