It's no secret that the venture capital industry is facing a liquidity crisis, with few IPOs or other exits even after a record-setting 2020-2021. Now we have numbers that show how bad it has gotten.
The U.S. venture capital industry invested $60 billion in startups in 2023, more than it recouped in revenue, the Wall Street Journal reported, citing data from PitchBook. This is the largest deficit recorded in PitchBook's 26 years of data. According to the data, U.S. venture capital firms returned just $26 billion worth of stock to investors in 2023, the lowest total since 2011.
Despite the exit gap, total venture funding over the past three years was the highest in industry history.
There are signs that the exit market could start to open up next year, with companies like Klarna and ServiceTitan both preparing for IPOs, which could help start cutting losses.