The State of U.S. Early-Stage Venture: 1Q23
Early-stage venture performance remained sluggish in 1Q23.
Apr 12, 2023 — 2 min read
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- While positive activity (i.e., markups) on the AngelList platform reached its highest levels since 2Q22, investment activity declined to the lowest rate ever observed in our dataset.
- Average valuations declined at most funding stages, while median valuations actually increased for later-stage deals.
- A majority of investment activity on AngelList focused around early-stage deals, even though the observed positive activity came from later-stage deals.
- 8.1% of investment activity in 1Q23 involved startups in the AI / ML space, the largest share ever observed in our dataset for the sector.
- Read all our findings in our 1Q23 State of U.S. Early-Stage Venture report.
After a challenging close to 2022, early-stage venture performance didn’t show signs of rebounding in the first quarter of the new year. While “positive” activity (the share of startups that raised a round or exited at a valuation increase) showed modest gains, investment activity (startups that raised a round or exited) declined to the lowest levels ever observed in our dataset.
The positive activity that did occur appears to be focused around later-stage deals, as median valuations actually increased for Series A and Series B deals on AngelList. Average valuations declined across all funding stages, with the exception of pre-seed deals.
While positive activity came from later-stage deals, a vast majority of general investment activity appears to have come from early-stage startups in 1Q23. Our data implies that, while high-quality later-stage startups can still raise at valuation increases, VCs may be waiting out the market in hopes of another material repricing event.
The 1Q23 State of U.S. Early-Stage Venture report offers detailed insight into how capital flowed into startups in 1Q23. Key findings from this quarter’s report include:
