What’s going on here?
The US venture capital landscape is slowing, with overall funding declining despite a strong stock market and increased interest in AI investments. Q3 2024 saw VC deals fall 32% to $37.5 billion due to liquidity concerns and stricter negotiations for startups. While the market cools, AI firms continue to attract significant investments, and recent Federal Reserve rate cuts may gradually revitalize VC activity.
Why should I care?
Established startups are choosing to remain private longer, utilizing secondary share sales for liquidity, which could stabilize cash flow and draw more VC interest. The growth of private markets reflects a shift in investment dynamics, challenging public markets and creating new opportunities for innovation.