It’s no secret that the enterprise capital business is going through a liquidity disaster as IPOs and different exits stay few and much between after 2020 and 2021’s record-breaking years. Now, we have now numbers that present simply how unhealthy it’s gotten.
In 2023, the U.S. VC business invested $60 billion extra into startups than it collected again in returns, in line with the Wall Street Journal, citing PitchBook knowledge. That is the most important deficit recorded in PitchBook’s 26 years of knowledge. The knowledge additionally discovered that U.S. VCs solely returned $26 billion price of shares again to their traders in 2023, the bottom complete since 2011.
Despite the void in exits, the previous three years have recorded the very best yearly totals of enterprise funding within the historical past of the business.
There are indicators that the exit market could start to open up subsequent yr — firms like Klarna and ServiceTitan each have IPOs within the works — which might assist begin to reduce that deficit down.
