Investment Analysis in Venture Capital: Overview for the Year 2024
The 2024 Venture Capital Report offers a comprehensive analysis of the US venture capital market, providing insights into various aspects such as financing rounds, noncompetes, private company options repricings, defense tech startups, deal terms, and regional trends.
Key Findings:
- US Venture Capital Market Analysis:
- The US venture capital market rebounded in 2024, posting mid to high single-digit returns. Younger vintages outperformed older ones, but the largest sectors (IT and healthcare) trailed smaller sectors in performance. The number of deals slightly declined, yet deal value increased substantially. Exits remained stable by number but rose sharply by value.
- Large Financing Rounds:
- The first half of 2025 saw a surge in large ($100 million+) VC raises, with $121 billion already surpassing the full 2024 total. The top 20 deals accounted for nearly 70% of H1 2025 deal value, heavily concentrated in AI startups.
- Noncompetes and Private Company Option Repricings:
- The trend toward institutionalization and maturation of venture capital suggests increased focus on governance, incentive alignment, and deal terms that balance employee retention and founder control.
- Defense Tech Startups:
- Reports note continued interest and investments in "hard tech," which sometimes includes defense tech, as part of venture capital portfolios, especially from corporate and corporate venture capital investors supporting capital-intensive sectors.
- Venture Capital Financing Deal Terms:
- Deal terms increasingly favor larger funds and bigger deals, with expectations that VC will begin to resemble private equity structures more, suggesting a tightening of terms, enhanced due diligence, and mature portfolio management.
Key Figures: - 2024 deal value: $213 billion in the US (up from $163 billion in 2023). - H1 2025 VC raises: $121 billion, led by AI startups and mega-rounds. - Fundraising is expected to drop to $56 billion in 2025, dominated by mega-funds funding large deals. - IPOs remain scarce but may increase with 10 tech IPOs in the first half of 2025 and a reopening IPO window.
The 2024-2025 US VC market is marked by greater capital concentration in mega-rounds, strong AI investment momentum, evolving deal structures geared towards institutionalization, and steady but selective exit activity, with notable diversification into growth equity alongside traditional VC. The report also offers key considerations for private company option repricings, regional breakdowns of the US venture capital market, and financing considerations and enhanced regulatory scrutiny regarding defense tech startups in the US venture capital market.
- In the 2024-2025 US Venture Capital market, there is a growing tendency towards investing in mega-rounds, particularly in AI startups, showcasing a significant focus on technology.
- As the US venture capital market moves towards maturity, there is a rise in ventures capital financing deal terms that resemble private equity structures, including increased due diligence, a tightening of terms, and a shift towards institutionalization.
