Weak 2024 exits forecast another down year for VC fundraising

Pitchbook just released its Q4 2024 Venture Monitor Report. It’s a good read and very comprehensive on the state of venture investing. One section that really stood out relates to fundraising by venture capital firms. According to Pitchbook, “Fundraising was slow in 2024, with $76.1 billion raised across 508 VC funds. Without enough return-generating exits and access to liquidity, LPs are either unable or unwilling to allocate more capital to venture. These investors have been focused on fulfilling capital calls from commitments they made during the frenzy of the pandemic era and have not received realized gains to help replenish their wallets. Fundraising figures will likely remain muted in 2025 until more paper returns turn into cash.”

We agree. The correlation between prior year exit volumes and current year fundraising is very strong (0.74 by count and 0.84 by volume), so 2025 fundraising could be even weaker than 2024. That means less capital in the coming years for startups and later stage tech companies; cash efficiency and frugality is going to be as important as growth for at least a few years. The appetite and capital to fund high burn and inefficient companies simply won’t be there like it was in 2020/2021.

Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.