How supported are venture capital markets up today? Imagine a traffic jam in which each car is worth a billion dollars in illiquid capital. Now imagine there are 1,000 cars in this traffic jam. Finally, realize that the $1,000 billion cars in front of you are only part of the story.
That’s what a recent data analysis shows is happening today in a critical venture capital market. The value of the most mature startups in the United States that must find an exit approached the $1 trillion mark by the third quarter of 2023, according to recent PitchBook analysis.
The figure underscores how weak exit sentiment has been over the past two years, and underscores the large mass of illiquid equity investments made in startups that call the United States home.
Exchange explores startups, markets and money.
Read it every morning on TechCrunch+ or get the Exchange newsletter every Saturday.
US exit delays are just one part of the bigger picture. PitchBook defines the “growth venture” fundraising arm as “any funding that is Series E or later, or any VC funding of a company that is at least 7 years old and has raised at least six VC rounds.”
In the US, this group represents just under $1 trillion in non-exit startup value, not counting investments in the last quarter of 2023. If we included startups from the rest of the world, that number would be even higher, no you name it how many more we would consider if we include slightly younger startups in the equation.
Caveats abound. Of course, not every startup that raised a “business growth” round is worth it, and many unicorns that avoided formally relisting themselves after 2021 could fit that bill. Furthermore, since we are only looking at the US today, we should remember that we are not seeing the full, global picture. However, the United States venture capital market is worth about half of the global total, so when we talk about Yankee territory, we’re still talking about a huge part of the startup market.
This morning, let’s look at where we can find the most locked-in value in startup land and how long it might take for venture-backed tech companies that have already reached the end of their private tenures to become public.
