Nearly 80% of venture capital funds raised in just two states as US LP retreats to shore
Venture capital funds in the United States raised more dry powder in the first three quarters of this year than in all of 2021, but it’s not evenly distributed: Big funds keep getting bigger while fundraising gets harder for with most other players. And third-quarter data shows that where a company’s headquarters is located seems to play an increasing role.
As of Q3 2022, U.S. venture firms have raised $150.9 billion across 593 funds, according to data compiled by PitchBook. While this represents an increase from the $147.2 billion raised in 2021, it marks a staggering decline from the 1,139 funds that closed last year.
A lot of these dollars have gone into established or established companies that have great fundraising potential, although some have obtained dollars by garnering hype. As a result, LPs are not interested in supporting companies outside of established venture hubs this year, marking an unfortunate reversal to the COVID-induced trend of being a lot of risk money. are finding their way into emerging ecosystems.