Some thoughts on H1 funding...
We released our H1 2024 funding analysis a couple of days ago, and there's plenty to sift through. Have a look! https://lnkd.in/gVB4hEiq There's a fair bit we didn't get to, however. Here's a few market data points that summarize the moment we're in: 1. It's 2018 again Deal volume and average deal size are the same as six years ago. Notably, Rock Health ended 2018 and 2019 with predictions of a market pullback... that seemingly never arrived. 2. Extension rounds are (still) in vogue In Q2 2024, fully 1/3 of all deals appear to be extension rounds - down from 55% of all deals in Q4 2023. To put this in perspective, for the whole of 2019 _just 4% of all deals_ met the criteria to be counted as "extensions" in our data set. (Yes. You read that right.) 3. Around 1/4 of extension rounds *appear* to be extensions of extensions Caveat: This is tricky to track precisely (because deal terms are not generally made public). Methodologically, "extension of extension" is inferred in cases where we tracked SEC data that shows a company raising two rounds in a row that have no designated round label (e.g., "Series Seed" or "Series F"). With that caveat out of the way, it's significant to note that "extensions of extensions" wasn't really a thing in 2023 (because extensions in 2023 mostly followed Seed or Series A rounds). By extension (ahem), I predict that capital market appetite for extensions will begin to run dry by the end of 2024 (which has implications for VC funding in 2025). 4. VCs aren't raising much money from LPs right now - and big generalist funds are raising the bulk of it. Per Pitchbook, just two funds (a16z and GC) raised almost half (44%) of all VC dollars so far in 2024 - twice the proportion "large funds" typically attract. Specialist funds (like Rock Health Capital) are perhaps that much more "special." 😅 And we're likewise incredibly fortunate to have closed our most recent fund in Q3 last year.