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The startup fundraising squeeze could persist as VCs struggle to refill their own coffers
In Q1, U.S. VC funds raised only $9.3 billion, according to PitchBook data. At this pace, VC fundraising will end the year at the lowest capital raised since 2013.
Many startups are hoping that the gradual opening of an IPO window and the prospect of interest rate cuts later this year will finally encourage VCs to be less stingy with their capital. The drastic decline in IPO and M&A activity over the last couple of years meant that LPs had meager cash distributions from their investments in VC funds. “I think a lot of people may fall out of the business over the next few years,” said Chris Douvos, a managing director at Ahoy Capital, which invests in funds and startups.
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