38% of VCs Disappeared From Dealmaking in 2023

Marina Temkin, writing at PitchBook: Boston-based OpenView stunned the VC world with news in early December that it laid off most of its employees and would stop all new investments months after raising its $570 million seventh fund. The 17-year-old firm, which managed $2.4 billion, was too prominent to keep its closure under wraps. But OpenView was far from the only investor that stopped backing startups this year. The number of active investors in US VC, which we defined as making two or more deals, plummeted by 38% in the first three quarters of 2023 compared to the same period last year, according to PitchBook data. That translates to 2,725 fewer firms making deals. The decline in active investors is far higher than the 28% decrease in deal count during the period, the Q3 2023 PitchBook-NVCA Venture Monitor shows. The data indicates that investors are not merely writing fewer checks. Some dealmakers may have run out of funds and could be deemed zombie funds. Others, such as crossover investors, may have stopped allocating to the VC asset class.

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