The number of active venture capital investors in the US has decreased by over 25% since 2021, driven by risk aversion among financial institutions. This trend has concentrated power among a few large firms, leaving smaller VCs struggling and skewing the dynamics of the US venture market.
The number of active venture capital investors has dropped by more than a quarter from a peak in 2021, as risk-averse financial institutions focus their money on the biggest firms in Silicon Valley. The tally of VCs investing in US-headquartered companies dropped to 6,175 in 2024 — meaning more than 2,000 have fallen dormant since a peak of 8,315 in 2021, according to data provider PitchBook.
But he added that those venture capitalists who failed to secure big returns in a low-interest rate environment before 2021 were going to struggle as “this is going to be a tougher market”. One factor is a dramatic slowdown in initial public offerings and takeovers — the typical milestones at which investors cash out of start-ups. That has staunched the flow of capital from VCs back to their “limited partners” — investors such as pension funds, foundations and other institutions.
Venture Capital Investment Startups Funding Consolidation
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