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Alternative Market Briefing

Despite some pretty notable flops, VC had a good year in 2019

Friday, January 17, 2020

Bailey McCann, Opalesque New York:

Venture Capital had some pretty epic failures in 2019. But even with a few speedbumps, new data from PitchBook shows that VCs ended the year with deal activity on par with 2018's record setting figures. VC's posted $250 billion worth of exits - 80% of which came from VC-backed IPOs. 2019 also recorded 237 megadeals, an 11.8% gain on 2018.

Overall capital raised by US venture funds reached $46.3 billion in 2019, the second highest total in the past decade. Data in the report shows that fund size is creeping up broadly - accounting for the growth in this statistic.

Valuations continue to rise and early-stage deal values hit an unprecedented level in 2019 climbing to a median size of $6.5 million. Angel & seed deal sizes have increased over the past seven years, landing at an annual median of $1.1 million in 2019. According to the report, startup founders are choosing to wait longer before pursuing angel, seed, or venture money in part because of the low cost involved in setting up a new company. When founders do come to market they tend to be valued higher at even the angel/seed stages because of the amount of work that can happen at a company before formal financing.

The report notes that the rise of early-stage megadeals was the big story for 2019. 53 such transactions were completed at $100 million or higher,......................

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