Private investing through venture capital vehicles is an important driver of the US economy and the source of much innovation. The start to 2022 for the industry is mixed because while fundraising, and investing in firms, appears strong, many recent exits don’t look so good, which may clog up the back end of the cycle. About 200 financings of $100 million or more were announced in the first quarter, but deal size and valuation for late-stage companies declined, likely reflecting the complete evaporation of IPOs and a decline in M & A activity. Investors begin to worry about their exits in late-stage firms. Fundraising appeared strong, with $70B in new fund commitments announced, but much of this reflects activity that actually occurred last year, with closings just now being finalized. Fundraising is likely to slow as exits slow. (NVCA Report)
