PE-VC investments fall 29% to $46 billion in 2022 (2024)

FAQs

How much venture capital was invested in 2022? ›

A Quarterly Wink and a Glance at Venture Capital

In 2023, there was $170.6 billion of VC invested in 15,766 deals, which was well below the $242.2 billion in VC invested across 17,592 deals in 2022. In fact, 2023 deal values were about $177 billion below the record levels achieved in 2021.

The Odds of Succeeding for a Startup Funded by a Top VC

Since there are 4,000 companies looking for funding, that translates to odds of 5.0%. Of the 200 that are funded by top VCs, 15 of those startups will generate nearly all of the economic return.

A typical VC firm manages about $207 million in venture capital per year for its investors. On average, a single fund contains $135 million. This capital is usually spread between 30-80 startups, though some funds are entirely invested into a single company, and others are spread between hundreds of startups.

Venture capital firms typically invest anywhere from $100,000 to $10 million or more in a company. The amount of money invested depends on the stage of the company, the potential for growth, and the amount of risk involved.

25-30% of VC-backed startups still fail

Experts from The National Venture Capital Association estimate that 25% to 30% of startups backed by VC funding go on to fail.

Venture capital funding supported fewer startups in the U.S. last quarter, according to new data from PitchBook. Investors backed about 3,000 deals over that period — down about a third from a year earlier — and spent $39.8 billion, down by nearly half.

So for every $100 million generated in profits, the partners take a $20 million to $30 million cut before distributing the rest among their investors. A successful VC for a top-tier firm can expect to earn somewhere between $10 million and $20 million a year. The very best make even more.

The TLDR; seed investors shoot for a 100x return; Series A investors need an investment to return 10x to 15x and later stage investors aim for 3x to 5x multiple of money. This translates into portfolio returns from 20% to 35% targeted IRRs.

Several articles and research papers have been published on the PME and the comparison of VC versus public stock performance. These studies often show that top-tier Venture Capital funds outperform public markets, while the median or average VC fund may underperform.

The outperformance of venture capital funds is also evident using an IRR (Internal Rate of Return) metric. The average annual IRR return of VC funds between 2005 and 2018 was 22%, compared to 16.6% for all other PE funds.

How long do VC investments last? ›

Venture capital funds typically have long tenures, beginning the first closing and running for 8-10 years. Fund managers usually seek pre-determined extension periods (2-3 years for example) to allow them for a smooth exit from all investments.

However , according to a study by the National Bureau of Economic Research , the average success rate of VC - backed startups is approximately 20 % . This means that only 1 out of every 5 companies that receive funding from VC firms will achieve significant success and generate substantial returns for investors .

Venture capital fund managers are paid management fees and carried interest. Depending on the firm, about 20% of the profits are paid to the company managing the private equity fund, while the rest goes to the LPs invested in the fund. General partners are usually due an additional 2% fee.

Annual salary and bonuses differ broadly in this field depending on the size of the VC firm and its specialization. In general, VC associates can expect an annual salary of $60,000 to $133,000. 1 With a bonus, which is typically a percentage of salary, the overall compensation can be much higher.

The value of venture capital fundraising in the United States experienced considerable fluctuations between 2004 and 2023. In 2023, U.S. venture funds raised 66.9 billion dollars across 474 funds. This was a steep decline from the record number of 172.8 billion in 2022.

Global venture funding in 2022 reached $445 billion — marking a 35% decline year over year from the $681 billion invested in 2021 — according to an analysis of Crunchbase data. But despite the slower funding environment in 2022, investors spent $100 billion more last year than the $342 billion invested in 2020.

FY 2022 Group revenue increased 24.3% year-on-year (YoY) to S$3,863.7 million and 4Q 2022 revenue rose 15.4% YoY to S$1,045.0 million. FY 2022 Profit attributable to owners of the Company increased 18.4% YoY to S$369.6 million and 4Q 2022 and Net Profit grew 3.5% YoY to S$98.0 million.

The largest venture funding deal to a U.S.-based startup in 2022 went to Epic Games, maker of the Fortnite video game series, with a $2 billion investment.