“Better than a sharp stick in your eye.”
2024's U.S. venture capital performance wasn't bad. It showed resilience, but certainly wasn't a return to 2021 as the industry had hoped a year ago.1
Large firms dominated fundraising in 2024. The dealmaking picture was complex; its slight improvement came from AI companies, which made up 29% of completed transactions. On the other hand, down and flat fundraising rounds represented 30% of deals. Exits stayed resolutely stuck despite three interest rate cuts, with companies in their A and B rounds making up 90% of the activity. As a result, distributions to Limited Partners (LPs) remained depressed, and future fundraising performance is still uncertain.
Keep reading for a recap of venture capital fundraising, dealmaking, and exits in 2024—and what the details mean for 2025.
Fundraising: When everyone knows your name
Most VC fundraisers slogged through 2024. They raised $76.1 billion, making it the lowest fundraising year since 2019. Firms launched a total of 508 new funds, marking the second-lowest count since 2014, when funds collectively raised $40.2 billion.
Established firms continued to attract the majority of capital, as LPs increasingly chose a “flight to quality.” The top 30 funds secured 75% ($57 billion) of the year’s total, with just nine funds raising 46%—approximately $35 billion. Andreessen Horowitz alone captured roughly 10% of the entire year’s capital. LPs funneled money into VC firms with reliable distribution track records, intensifying the consolidation trend.
AI-focused startups, with their expectations for marketing and recruitment support alongside capital and advice, further fueled this trend. These startups gravitated toward established firms offering larger funds and more elaborate support models. Consequently, the most promising and resource-intensive AI startups concentrated their efforts on partnering with these well-established firms.
The flight-to-quality dynamic has created a further split between the fortunes of established and emerging fund managers. Emerging managers that came out of the frothy era of 2020-2022 are struggling to raise a second fund without meaningful exits. In fact, emerging fund managers raised only 20% of 2024’s capital ($15 billion) across 245 funds, reversing the historic pattern in which the number of smaller emerging funds exceeded the established groups.
The fundraising slowdown links to the exit market. As LPs wait for distributions, they are now focusing on fulfilling commitments made earlier in the decade while slowing their exposure to new funds.
Dealmaking: AI dominates
Dealmaking activity presented a mixed picture. On the positive side, investors closed an estimated 15,260 deals in 2024, marking the third-highest count since 2014. They also generated $209 billion in deal value, ranking third and rising 29% from 2023 levels. AI/ML companies drove much of this growth, accounting for 29% of transactions and 46% of deal value.
On the downside, 30% of the deals involved flat or down rounds, while average and median deal values continued to decline from their 2021 peak across all stages. Activity favored larger players. Investors closed nearly 4,000 deals in Q4, with small and early-stage companies driving most of the deal volume. Meanwhile, 15 companies raised over $500 million each, contributing more than half (54.4%) of Q4’s $74.6 billion in deal value.
While increased deal activity is a reason for hope, it is only a partial indication of the industry’s health. Many experts hope the additional interest rate cuts forecast for 2025 will support the industry’s recovery, but the market seems likely to continue its bifurcation with capital flow remaining concentrated in AI/ML companies.
Exits: Private for longer
In 2024, companies generated $149.2 billion in exit value, marking an improvement over the past two years and ranking fifth since 2014. Investors executed an estimated 1,259 exits, the sixth-highest total since 2014 and a 10% increase from 2023.
Despite this progress, those hoping for a broad-based recovery faced disappointment.
Twenty-one exits exceeding $1 billion in value contributed 42% of the total, indicating an outsized role played by small liquidity events. IPOs produced more value in 2024 than in the past two years, but their share of the total remains much lower than the levels of 2019-2021. Many M&A deals focused on small and early-stage companies—sales of low-growth or struggling businesses that avoided shutdowns and allowed resources to shift to more promising opportunities.
Large companies are staying privately owned for longer, as they can still raise money and avoid a contraction in enterprise valuation. Acquisitions of large VC-backed companies have also encountered regulatory challenges, further reducing the types of big-dollar transactions that return serious money to LPs and create momentum for further exits.
Conclusion: 2025 will be a __ year.
With changes in the U.S. administration and significant geopolitical turmoil, your guess on which adjective should fill in the blank is as good as anyone’s. Ongoing rate cuts were a bright light in 2024; this light has recently dimmed, but there’s hope that a more relaxed regulatory regime will boost trade sales.
Venture capitalists and entrepreneurs are optimists, and crises often point to market opportunities. Innovations like the revamped investment model pursued by Touring Capital and new exit options, such as continuation funds, show that VCs are gearing up for new ways forward. And if you’re one of the venture capital GPs looking to innovate in the coming year, Juniper Square is here to be your partner in creating operational alpha and delivering a world-class investment experience for LPs.
1 PitchBook/NVCA Venture Monitor for Q4 2024, https://files.pitchbook.com/website/files/ pdf/Q4_2024_ PitchBook-NVCA_Venture_Monitor.pdf, January 10, 2025.