In late 2023, much of the venture market was looking over the edge.
The Venture Capital Winter Deepens
Venture capital funding for startups has been on the decline, and the PitchBook-NVCA Venture Monitor described Q3 2023 as nearly the lowest quarterly deal value in six years.
- The number of venture capital deals has plateaued.
- Venture debt has also seen a downturn.
- The initial public offering (IPO) market has contracted dramatically. There have been very few tech IPOs since the end of 2021, with Instacart and Klaviyo among the rare exceptions in late 2023.
Competition for funds has intensified, particularly at the seed stage. The flow of new entrants, juxtaposed with the funding squeeze, is a formula for heightened selectivity among investors. A concerning indicator for the startup ecosystem is the diminishing runway for many of these companies. In our view, if funding does not return before that runway runs out, startup failures are likely to rise.
Update, October 2026: US venture investment recovered after 2023. The PitchBook-NVCA Venture Monitor reports $515.8 billion invested in US startups through September 30, 2026, the highest annual total in its data, with most of it going to AI companies.
Zan Bennett
David Manela is the founder of Exactius and creator of the Growth Operating System — a framework for deploying capital-efficient, compounding growth inside scaling companies.
FAQ
Frequently asked
Was the venture capital market at a precipice in December 2023?
Looking back, 2023 was the low point for US venture deal value, and investment rose in the years that followed. The PitchBook-NVCA Venture Monitor's Q3 2026 edition, with data as of September 30, 2026, shows about $166 billion invested in US startups in 2023, about $215 billion in 2024 and about $320 billion in 2025. Most of the recovery went to AI companies.
How much of US venture funding went to AI in 2025?
According to the Q4 2025 PitchBook-NVCA Venture Monitor, published in January 2026, AI companies accounted for 65.4% of US venture deal value in 2025 and 39.4% of deal count. AI startups took about two thirds of the dollars while making up well under half of the deals, as investment concentrated in large rounds for a small number of AI companies.
What has happened to US venture funding in 2026?
The Q3 2026 PitchBook-NVCA Venture Monitor reports $515.8 billion in US venture deal value across an estimated 14,199 deals through September 30, 2026. That is already the highest annual total in its dataset and roughly 44% above the previous full-year record of $357.9 billion set in 2021. AI startups received 82.7% of 2026 deal value through that date.
How did global venture funding change after 2023?
Crunchbase News reported on January 7, 2026, that global venture funding reached $425 billion in 2025, up 30% from $328 billion in 2024. AI companies raised $211 billion of that, up 85% from $114 billion in 2024, which was roughly half of all global venture funding in 2025. Crunchbase's totals differ from PitchBook's because the two use different methods.
Did the IPO market for venture-backed companies reopen after 2023?
Yes, slowly. Instacart and Klaviyo, both venture-backed, went public in the third quarter of 2023, according to the PitchBook-NVCA Venture Monitor for that quarter. For 2025, the Q4 2025 edition counted 48 US venture-backed IPOs, 17 of them unicorns, and described the IPO count as muted. In Q3 2026, 18 venture-backed companies went public, 12 of them in healthcare.
Are startups still raising bridge rounds and down rounds?
Yes, though down rounds became less common by late 2025. Carta's State of Private Markets review for Q4 2025 found that fewer than 14% of new rounds that quarter were down rounds, the lowest rate in three years. About 29% of seed and Series A deals in 2025 were bridge rounds. Startups on Carta raised $119.5 billion in 2025, up 16.9% from 2024.
Related Reading
Keep going
Ready to fix the system?
Your growth system is either compounding or degrading.
Book a diagnostic call. We'll identify where your growth system is breaking and what it's costing you.