Preqin and First Republic Update: US Venture Capital in Q3 2019

US venture capital full-year deal activity is on track to reach a new annual record, even though activity in Q3 slowed slightly, to 1,027 deals and $22bn in capital deployed.

The report finds that:

  • Early-stage investments (Seed and Series A) accounted for 51% of the total deals completed in Q3 2019 and 19% of total dollars.
  • The exit environment is healthy: 418 exits raised an aggregate of $65bn as of the end of Q3 2019, meaning the year may exceed the total dollar value of exits in 2018.
  • Fundraising for venture capital funds remains robust, as nearly 300 firms have closed through Q3, raising a total of $35bn.
  • The pattern of fund closures has changed, as only two expansion/late-stage funds closed in Q3, raising a combined $295mn.
  • Early-stage funds in particular were quite successful in their raises, on average closing at, or above, stated targets.
  • The market for new fundraises continues to remain very active, with 1,027 funds in market, seeking $98bn in capital.
  • Micro VC fundraising in 2019 is likely to outpace 2018 by year end: $6.1bn was raised in the first three quarters of 2019, meaning micro VC fund managers have already secured nearly 80% of the total capital ($7.8bn) raised in the previous year.
  • Vintages 2010-2016 are posting median IRRs of 14.9%, compared to 18.7% for vintage 2011 funds.
  • Sequoia Capital is estimated to hold the most dry powder ($4.5bn) of all US-based venture capital firms, as of September 2019.

Produced in partnership with First Republic Bank, this report looks at how the US venture capital industry has fared in Q3 2019, presenting the latest data from Preqin Pro on deals & exits, fundraising, performance, investors and more. We also look at how women-owned firms are gathering momentum (although in the micro space, progress is notably slower), how foundations are starting to drop off, and how distributions are on course for an increase.

The data in this report is also available to download in Excel format.

  • 12/11/2019
  • PE
  • VC

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