We all know funding for startups has been in short supply over the past year, but a recent PitchBook article points to a large drop in active venture capital investors in the US. They define active investors as those who have made two or more deals, which dropped by 38% in the first three quarters of 2023 compared to the same period last year. That means 2,725 fewer firms are making deals in 2023.
They also point out that the drop in investors exceeds the drop in deal count during the same period, which was 28%. And their data shows it’s not just a lack of deals being done; in some cases, funds could have run out or become “zombie funds,” and some may have stopped allocating to the VC asset class. These inactive investors might sell VC assets on secondary markets or wait for a rebound valuation. READ MORE