The state of the global venture capital market leaves much to be desired, and the United States hasn’t escaped the slowdown: PitchBook and the NVCA both reported that the “third quarter of 2023 nearly saw the lowest overall venture deal value in six years and the lowest deal count in roughly three.”
In fewer words: Things are not good.
The news is not all bad, though. Despite PitchBook data indicating that venture totals were nearly flat in Q3 2023 compared to Q2 2023, deal volume has apparently also declined. The fact that startups managed to raise roughly the same amount of money in fewer rounds means that each round raised more capital, on average.
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And the seed stage is where this good news comes from. Sure, the total value of pre-seed and seed deals fell again in the third quarter and deal volume is also in decline in the United States. But seed rounds are getting more expensive as deal count sags faster than the total value of transactions.
Per PitchBook, through the third quarter of 2023, seed-stage startups clocked a median pre-money valuation of $12 million, up from $11.1 million last year. That 2022 figure was a record and startups are set to surpass it this year.
The median and mean deal sizes at this stage are also ticking higher. The median seed round size in the United States is flat this year at $3 million, meaning that the investors paying top dollar are likely getting less for their money than they did last year. Notably, the 75th percentile seed deal reached a high point of $5.3 million thus far in 2023, while the average dipped a little to $4.5 million through Q3 2023 compared to $4.9 million in 2022.