Pitchbook Venture Monitor Report 2018 Q2

At the halfway point of 2018, the US venture capital ecosystem continues to see the crystallization of a new normal where capital is concentrated into fewer, larger deals. At the same time, the improved access to the IPO market—particularly for enterprise tech companies—has been a welcome trend. The recently wider window of opportunity in the IPO market is certainly a positive development after several lackluster quarters in 2016 and early 2017, and many industry professionals have an optimistic outlook, although the longevity and level of openness remain to be seen.
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NVCA venture MONITOR PitchBook NVCA venture Deal company capital 2Q 3Q 4Q
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NVCA venture MONITOR PitchBook NVCA venture Deal company capital 2Q 3Q 4Q
2Q 2018
Massive $57.5B invested into 
US VC-backed companies 
through 1H 
 Page 4
The definitive review of the US venture capital ecosystem
IPOs riding back toward decade 
highs, as overall exit value 
remains elevated
Pages 27
League tables for 2Q deals, 
investors, exits and more
Pages 32
In partnership with
Credits & Contact
PitchBook Data, Inc. 
JOHN GABBERT Founder, CEO 
ADLEY BOWDEN Vice President, 
Research & Analysis
Content 
KYLE STANFORD Analyst 
CAMERON STANFILL Analyst 
ALEX FREDERICK Analyst 
BRYAN HANSON Senior Data Analyst 
JENNIFER SAM Senior Graphic Designer 
RESEARCH 
reports@pitchbook.com
National Venture Capital Association 
(NVCA)
BOBBY FRANKLIN President & CEO
MARYAM HAQUE Senior Vice President of Industry 
Advancement 
DEVIN MILLER Manager of Communications & 
Digital Strategy
Contact NVCA
nvca.org
nvca@nvca.org 
Silicon Valley Bank 
GREG BECKER Chief Executive Officer 
MICHAEL DESCHENEAUX President 
DAVID M. SABOW Group Head of Life Sciences, 
Client Funds and Bank Products 
JIM MARSHALL Head of Emerging Manager Practice 
STEVEN PIPP, CFA Research Manager 
 
Contact Silicon Valley Bank 
svb.com 
venturemonitor@svb.com
Perkins Coie 
BUDDY ARNHEIM Partner, Emerging Companies & 
Venture Capital 
FIONA BROPHY Partner, Emerging Companies & 
Venture Capital
CHARLES E. TORRES Partner, Emerging Companies 
& Venture Capital 
 
Contact Perkins Coie 
perkinscoie.com 
startuppercolator.com
 
Solium 
KEVIN SWAN VP Corporate Development 
JEREMY WRIGHT Head of Private Markets 
STEVE LIU Head of Solium Analytics 
JERON PAUL CEO, Capshare 
 
Contact Solium 
solium.com
Executive summary
3
Overview
4
Angel/seed
8
First financings
9
Early-stage VC
10
Late-stage VC
11
SVB: Adapting to capital overload: Investors chart 
new paths
12
Activity by region
13
Activity by sector
15
Life sciences
16
Q&A: Research boom in life sciences benefitting 
patients and investors alike
17
Corporate VC
20
Perkins Coie: An evolving VC market needs 
evolving participants
22
Growth equity
24
SVB: Nontraditional investors, family offices seek 
earlier-stage deals
26
Exits
27
Fundraising
29
League tables
32
Methodology
35
Contents
2 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Executive summary
3 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
At the halfway point of 2018, the US venture capital ecosystem continues to see the crystallization of a new normal where capital 
is concentrated into fewer, larger deals. At the same time, the improved access to the IPO market—particularly for enterprise tech 
companies—has been a welcome trend. The recently wider window of opportunity in the IPO market is certainly a positive development 
after several lackluster quarters in 2016 and early 2017, and many industry professionals have an optimistic outlook, although the 
longevity and level of openness remain to be seen.
2Q 2018 was the fifth consecutive quarter with 10+ venture-backed IPOs, which is good news despite not having reached the full 
potential predicted for well over a year. The strength of the venture-backed IPO market during this moderately successful run has been 
primarily driven by biotech companies, which continue to account for the majority of venture-backed IPOs. In comparison, the tech 
IPO market has remained relatively subdued, although enterprise tech IPOs have been strong in 2018 and have come to overshadow 
consumer tech IPOs in both number and post-IPO valuations. 
The rising success of enterprise tech IPOs has fueled public market optimism, but masks the longer-term issue of fewer public companies 
in the US. Today, the US has about half the number of total listed companies compared to 20 years ago, despite GDP more than doubling 
over that time. This major reduction in both IPOs and the number of public companies in the US is now coinciding with highly-valued 
venture-backed companies, i.e. unicorns, staying private longer. These trends bring to light two concerns: 1) the long-term health of the 
US public markets, and 2) public market investors losing out on investment gains during the high-growth phase when companies are still 
private.
The decline in venture-backed IPOs and in the number of public companies in general can largely be traced to three major trends that 
have appeared since around 2000: 1) the increase in costs and complexity of being a public company; 2) the collapse of research coverage 
and liquidity for small capitalization companies; and 3) the market focus on short-termism that harms innovative companies with long-
term time horizon projects. 
To address these complex issues, NVCA and the venture industry remain engaged with policymakers and regulators, and together with 
the Chamber of Commerce and other organizations last April, released the report titled “Expanding the On-Ramp: Recommendations to 
Help More Companies Go and Stay Public.” The report provides a blueprint for policymakers to address the challenges to both launching 
IPOs and remaining a public company, as well as policy recommendations for enhancements to the reforms put in place by the 2012 JOBS 
Act. Several of these proposals have already been passed out of the House Financial Services Committee. 
While the short-term outlook remains positive for the IPO market, M&As, which have typically been the dominant liquidity path 
for venture-backed companies, have had a slow year through the first half. Some venture investors, however, anticipate seeing an 
acceleration of M&A activity in tandem with a more active IPO window.
Though the federal tax reform bill passed in late 2017 preserved key industry priorities and avoided other tax increase proposals, VCs 
in California have since been faced with a proposal to impose an additional 17% surtax on carried interest, which could do significant 
damage to the dominant hub of the world’s entrepreneurial ecosystem. 
Venture firms, NVCA and other groups jumped into a state advocacy campaign and fought against this surtax, including sending a 
VC sign-on letter with over 178 signatories opposing the proposed state legislation. While many states across the US and countries 
around the world try to emulate California’s dominance in high-growth startup activity, if this surtax is put in place, the impact on the 
entrepreneurial ecosystem would be extremely disruptive to the California entrepreneurial economy. While the issue’s momentum has 
been blunted in 2018, it will be back in 2019.
Looking ahead, two other public policy issues that could have a significant impact on VCs and startups are: 1) immigration, specifically 
the Department of Homeland Security’s delay and intention to rescind the International Entrepreneur Rule (IER); and 2) the ongoing 
movement in Washington to scrutinize foreign investment into the US—particularly from China. In late June, NVCA and the venture 
community’s defense of the IER continued through the filing of a comment letter and highlighting the impact that immigrant 
entrepreneurs and the companies they found have had on the US economy and innovation. Related to foreign investment, the proposed 
Foreign Investment Review Risk Modernization Act (FIRRMA) threatened to increase oversight over foreign LPs and co-investors by 
the Committee on Foreign Investment in the US. As FIRRMA was considered on Capitol Hill, NVCA improved the legislation through its 
advocacy efforts. The bill is highly likely to become law this year, and NVCA will continue to engage on this topic during the rulemaking 
process.
Setting aside public policy curveballs, the resilience of the venture ecosystem and the drive toward innovation and investment returns 
forges on. Total capital invested into high-growth startups and total capital raised by venture funds show no signs of slowing down in 2H 
2018, with full-year capital invested on track to reach another record high and capital raised on track to hit at least $30 billion for the fifth 
consecutive year.
4 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
$37.1$27.0$31.3$44.4$41.7$47.4$71.9$82.2$75.6$81.9$57.54,716 4,470
5,388
6,738
7,865
9,244
10,509 10,606
8,939
8,815
3,997
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Deal Value ($B)
# of Deals Closed
0
500
1,000
1,500
2,000
2,500
3,000
3,500
$0
$5
$10
$15
$20
$25
$30
$35
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2011
2012
2013
2014
2015
2016
2017
2018
Deal Value ($B)
# of Deals Closed
Angel/Seed
Early VC
Late VC
Overview
2018 deal value has surpassed six of past 10 years 
US VC activity
Past two quarters result in highest quarterly deal values in past decade 
US VC activity
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor
For an industry that has been characterized 
by capital availability over recent years, 
the first half of 2018 has only exacerbated 
feelings of excess with more capital 
invested in a six-month timeframe than 
any time in recent memory. Through 2Q, 
$57.5 billion has been invested in US VC-
backed companies, exceeding the full-year 
total for six of the past 10 years. Beyond 
basic measures of VC investment, 1H has 
also seen 94 financings completed of at 
least $100 million, 42 unicorn financings—
including seeing Bird reach unicorn status 
in just 12 months—and the first close of 
the largest US VC fund ever. To say capital 
availability is high would be putting the true 
state of the US VC industry lightly.
US VC deals have continued to grow in size, 
and not only at the top end of the market. 
Angel & seed deals this year have come 
in at a median size of $830,000 and $2.1 
million, respectively, each a new decade-
high figure for the time being. Together, 
those deals have come along with a median 
valuation of $7 million, which sits at 
roughly double the median valuation of the 
stage from 2012, and is $1 million higher 
than 2017’s figure. The upward shift in deal 
sizes has now persisted for almost the past 
decade across all stages. And while mega-
deals continue to add an increasing bulk 
to overall figures, smaller deal size buckets 
are also gaining steam. For example, early-
stage deals between $10 million and $25 
million are on pace to surpass $10 billion in 
aggregate deal value this year, the first time 
we have seen that happen. The reasons for 
this growth are plentiful, but the number of 
5 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
PE investors continue to join large rounds 
US VC activity with PE participation
Unicorns set for record year 
US unicorn activity
Companies aren’t entering VC lifecycle until later 
Median age (years) of companies by series
$0.6$0.8$0.9$6.3$2.4$2.6$13.6$16.9$18.5$17.4$11.86
7
9
27
24 23
71
80
55
72
42
20082009201020112012201320142015201620172018*Deal Value ($B)
# of Deals Closed
$11.0$7.0$6.7$12.4$9.2$10.5$21.1$27.0$26.0$22.6$17.6680
465
433
532
566
655
787 780
660
646
368
20082009201020112012201320142015201620172018*Deal Value ($B)
# of Deals Closed
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
investors active within the US VC industry 
continues to be a major reason. That 2018 
is pacing to see more than 300 new funds 
close this year only adds to the growing 
opportunities for founders to raise.
Nontraditional investors continue to move 
into the market as well, with 2018 currently 
pacing to be the fifth consecutive year that 
more than 1,500 deals were completed 
with participation from these investors—PE 
firms alone have been involved in 368 VC 
deals already. These deals have combined 
for over $36 billion of invested capital, 
roughly 63% of the total capital invested 
in 1H. Nontraditional investors are both 
a partial cause—VC funds themselves 
have had more dry powder with which to 
work over the past few years than ever 
before—and a result of companies staying 
private longer. The likelihood is high that 
these firms continue to stay active within 
VC, given that companies continue to stay 
private longer while also needing capital 
infusions to continue growth. The average 
time to exit in 2018 is 6.1 years from the 
first VC financing the company has raised. 
This figure has risen nearly each year over 
the past decade, and, coupled with the high 
capital availability from VCs, is a reason for 
the high increase in unicorns and other high 
valuations.
Unicorns themselves have had an active 
year in both dealmaking and exits. 42 
companies have closed deals with a 
valuation of at least $1 billion, pacing the 
year to reach the previous high from 2015. 
Bird, an electric scooter transportation 
company, became the fastest company to 
reach the coveted unicorn valuation after 
it raised its fourth round in less than 12 
months—the company has since raised 
another round at a valuation of $2 billion. 
As the number of unicorns continues 
to grow, so do the paper gains and the 
unrealized value still illiquid from investors 
and LPs. For unicorn rounds raised in 
2018, the average time between the new 
funding and the company’s first VC round 
has stayed above six years, nearly as long 
as the average time to exit. Though six 
US unicorns have completed an exit this 
year, and several others are waiting in IPO 
registration, the extended risk profiles will 
likely claim several victims. Domo, once 
valued at $2.3 billion, has seen its value 
3.1 
3.9 
5.2 
6.8 
8.2 
0
1
2
3
4
5
6
7
8
9
10
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 2018*
Angel/Seed
Series A
Series B
Series C
Series D+
6 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
drop below $600 million after completing 
its IPO. This is something that we have 
expected to happen, especially as unicorns 
have continued to raise further rounds and 
grow in the private market. 
Though exits overall have stayed low 
relative to the 2014 and 2015 highs, more 
exits have been completed this year than 
had been at the same time period last year. 
The median exit size has reached $105 
million, and the average has surpassed 
$225 million, each representing the highest 
exit value figure we have tracked. The 
average post-valuation of 2018 exits sits 
at $581 million after 1H, more than double 
the value seen in full-year 2016, and more 
than $150 million higher than even 2017’s 
average value. Despite a lower number of 
completed exits than has been seen in the 
past, it’s undeniable that capital is being 
returned to investors, even if it may be 
taking longer.
The fundraising environment, which has 
stayed hot, may indicate that exit timelines 
will continue to lengthen and companies 
will continue growth in the private market. 
Eight funds have been closed on at least 
$500 million, including two larger than $1.3 
billion. But still in the market is Sequoia’s 
record-setting fund that has targeted a 
reported $8 billion in size—the firm has 
held a first close on $6 billion. The global 
fund is seemingly the first domino to fall as 
a result of SoftBank’s activity, offering some 
companies an alternative investor when 
seeking massive late-stage financings, 
especially if the company isn’t looking to 
raise the minimum $100 million the Vision 
Fund seeks to invest. Sequoia’s fund is 
undoubtedly an outlier within the industry, 
but the median fund size continues to 
creep upward, hitting $65 million through 
2Q. Though larger funds don’t necessarily 
need a longer lifecycle, the flexibility that 
is available because of the extra capital 
allows these investors to stay with private 
companies and invest further into the 
lifecycle of winners. With the year pacing 
to see 320 new US VC funds entering the 
market this year, we don’t believe that 
current trends will subside in the near term. 
This year will likely become the fifth straight 
year to record more than $30 billion in 
new commitments, adding dry powder to a 
market already awash with capital. 
6.3
6.1
5.3
5.0
 4.0
 4.5
 5.0
 5.5
 6.0
 6.5
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 2018*
Average
Median
Exit times lower slightly in 2018 
Median and average time (years) to exit 
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018*
Deal Value ($B)
VC Fund Capital Raised ($B)
VC capital raised has tracked well with overall deal value 
Capital raised vs. capital invested ($B) 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018 
7 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
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8 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
$682.3$591.7$531.7$754.3$852.8$1,134.5$1,253.1$870.0$1,573.7$1,088.0$1,379.1$1,585.4$1,279.8$1,418.1$2,171.0$1,903.4$2,092.2$2,176.2$2,160.2$1,918.8$1,698.5$1,714.0$1,725.4$1,544.0$1,625.5$1,684.0$1,931.7$1,736.1$1,918.6$1,839.30
200
400
600
800
1,000
1,200
1,400
1,600
$0
$500
$1,000
$1,500
$2,000
$2,500
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2011
2012
2013
2014
2015
2016
2017
2018
Deal Value ($M)
# of Deals Closed
Angel & seed deal value has slowly crept back toward highs of 2015 
US angel & seed activity
Angel & seed
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018 
PitchBook-NVCA Venture Monitor 
$0.56 
$0.83 
$1.68 
$2.12 
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
2010
2011
2012
2013
2014
2015
2016
2017 2018*
Angel
Seed
Deal sizes continue to grow 
Median US angel & seed deal size ($M)
Despite predictions of a continuing 
decline, the angel & seed market has 
remained exceptionally steady in the first 
half of 2018, especially in terms of capital 
investment. While still on a downward 
trajectory, deal counts are falling at a 
slower rate than in 2015 and 2016. Capital 
invested has been more resilient, with 
angel & seed activity closely matching the 
broader VC market’s trend of fewer but 
larger deals. In 2Q 2018, capital invested 
came in only slightly below the previous 
quarter with $1.8 billion invested across 
792 deals.
While the angel & seed deal count has 
declined over the last three years, it is 
key to view the data over a longer time 
horizon. For instance, even after falling two 
consecutive years from a peak in 2015, 
the current average quarterly investment 
level is still four times higher than the most 
active quarter in 2008. The initial run-up 
in angel & seed activity that began in the 
early 2010s came on the back of a number 
of sizable VC exits (the largest of which 
was Facebook), which minted a large group 
of newly wealthy individuals who wanted 
to invest in the next generation of private 
technology firms. As competition increased 
at the earliest stages of investment, many 
of these entrepreneurs and high-net-worth 
individuals have been spurred to launch 
their own VC firm or join angel groups to 
access larger deals.
This increasing institutionalization of the 
angel & seed space is a huge driver of 
the shift we’re seeing in the ecosystem. 
Deal sizes are expanding to unforeseen 
levels, but this has coincided with 
complementary step-ups in the median 
percentage acquired, which has crept up 
to 26.7% from 20% just five years ago. 
This shift has occurred as investors need 
to reconcile the need to offer more capital 
to nascent startups while reconciling 
the economics and overall risk/return 
characteristics of their fund, which calls 
for taking an increased percentage of 
ownership. Investors have also responded 
by becoming more selective in the 
companies they back, requiring companies 
to be more mature than they have been 
historically. Especially with the high failure 
rates in the initial stages of a company’s 
life, investing in fewer companies goes 
against the traditional seed strategy and 
creates more concentration risk in the 
portfolio, necessitating increased scrutiny 
of investments.
9 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
First financings
$5.8$4.0$4.5$6.0$7.1$7.2$7.7$8.8$7.0$7.3$5.41,720 1,626
2,034
2,736
3,213
3,456
3,676
3,427
2,667
2,545
947
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Deal Value ($B)
# of Deals Closed
1H pacing year for new record 
US first financing VC activity
Slight uptick in first financing deal value 
US first-financing as % of total US VC activity
0
2,000
4,000
6,000
8,000
10,000
12,000
20082009201020112012201320142015201620172018*First VC
Follow-on VC
First-time deals pacing for down year 
US first-financing VC rounds vs. follow-on VC rounds
8.9%
9.3%
28.9%
23.7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Deal Value
Deal Count
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018 
$1.1
$1.5
$3.2
$6.3
0
1
2
3
4
5
6
7
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Median
Average
First financings sizes on upward swing 
Median and average US VC first financing size ($M)
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10 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Early-stage VC
$4.6$5.2$4.9$5.6$4.9$7.2$6.3$6.3$6.1$6.2$6.2$5.0$5.6$6.8$7.5$9.5$9.6$10.50
100
200
300
400
500
600
700
800
900
$0
$2
$4
$6
$8
$10
$12
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2014
2015
2016
2017
2018
Deal Value ($B)
# of Deals Closed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$25M+
$10M-
$25M
$5M-
$10M
$1M-
$5M
$500K-
$1M
Under
$500K
$8.7
$11.3
$24.3
$29.3
$0
$5
$10
$15
$20
$25
$30
$35
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Series A
Series B
Companies raising more early 
US early-stage activity (#) by size
Deal sizes growing rapidly 
Median amount raised ($M) at time of funding by series
As large investors move in, early-stage capital grows 
US early-stage VC activity
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
Early-stage investing continues to climb 
higher, recording a seventh straight 
quarterly increase in capital invested. In the 
second quarter, we recorded $11.5 billion 
invested into early-stage companies with 
the average deal size growing to a decade 
high of $18 million. Outlier deals drove the 
investment total even higher, as the capital 
availability for giant funding rounds moves 
into earlier stages of the market. This is 
manifested through 24 $100+ million 
funding rounds, including the $100 million 
Series A raised by machine-learning drug 
discovery company Insitro, led by Foresite 
Capital Management, Andreessen Horowitz 
and ARCH Venture Partners.
While these deals are obviously not 
representative of the entire early-stage 
market, they are indicative of the massive 
amount of capital being put to work in the 
asset class regardless of stage. Indeed, 
deals over $25 million now make up more 
than 50% of 2018 early-stage deal value. 
Furthermore, the median amount of capital 
raised by companies at the Series A and B 
level has shown a steady uptrend over the 
past decade. This has pushed the median 
at Series A to $11.3 million and Series B to 
$29.3 million, representing a greater than 
twofold increase from 10 years ago, further 
illustrating the extreme shifts even at the 
early stage.
At the sector level, fintech has received 
considerable attention from early-stage 
investors, representing 11% of deal count 
in 2Q 2018. Startups that utilize blockchain 
technology to innovate on financial 
processes have become more prevalent 
over the past quarter, with three of the five 
largest fintech rounds raised by companies 
boasting a blockchain focus. This list 
includes enterprise blockchain provider R3, 
settlement platform Paxos and home equity 
lender Figure. Financial services is one of 
the more clear applications for blockchain 
technology, as the transactional aspect 
meshes with blockchain’s primary benefits 
such as immutability and security. 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
$9.5$6.6$7.2$5.0$5.8$6.6$6.3$6.0$6.2$6.7$7.1$6.8$9.3$13.4$9.8$12.2$13.1$11.2$13.9$10.9$11.8$15.5$10.0$8.1$8.7$12.4$15.2$9.3$18.7$14.90
100
200
300
400
500
600
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2011
2012
2013
2014
2015
2016
2017
2018
Deal Value ($B)
# of Deals Closed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$50M+
$25-
$50M
$10M-
$25M
$5M-
$10M
$1M-
$5M
Under
$1M
Investment into the late stage continues 
at a strong clip, as the definition of what 
constitutes as the “late stage” is stretched 
by a steady feed of new unicorns and aging 
decacorns that are delaying liquidity events. 
This past quarter, $15 billion was invested 
into 475 late-stage deals. With essentially 
no change in deal count from the first 
quarter, this represents a remarkably 
steady volume of deals at the late stage, 
as investors sustain their demand for 
developed businesses in the private 
markets.
This demand was evident in valuations at 
the late stage in 2Q 2018, which extended 
to $278 million—24% higher than 2017’s 
already lofty valuations. Selling smaller 
ownership stakes for larger sums of capital 
is common as a company gains traction, 
but this has become a necessity to retain 
the performance incentive for founders 
and vested employees of VC-backed 
companies. As the age of companies 
seeking late-stage rounds has extended 
to unprecedented levels, though, a knock-
on effect of raising more venture rounds 
is a lack of room on the cap table. With 
each subsequent round, the company 
must weigh the tradeoffs of diluting the 
employees’ and founder’s ownership stakes 
against fulfilling the company’s increasing 
appetite for cash to sustain growth. 
Another impetus for raising additional 
rounds is that holding large current cash 
balances or having the ability to raise 
huge sums has become a key competitive 
advantage in many business models. For 
instance, Airbnb’s extensive fundraising 
history and ability to raise billions of dollars 
represent huge barriers to entry for other 
firms in the short-term hospitality rental 
market. 
On a similar note, secondary selling into 
late-stage financings has become more 
common as a means of providing liquidity 
to earlier investors or employees while 
making space on the cap table. The most 
extreme example was the $8 billion 
secondary sale of Uber in January, but 
these deals have been occurring with more 
frequency over the last few years. This is 
a logical progression as companies raise 
increasingly more capital and retain private 
status longer. It allows early investors 
to achieve some liquidity and close out 
their funds without forcing an exit, plus 
employees can realize some gains and take 
some risk off the table. Since the drivers of 
the “private for longer” trend don’t seem to 
be going anywhere, we expect secondary 
sales to become an increasingly integral 
part of the VC environment. 
11 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Late-stage VC
Quarterly late-stage deal values rising 
US late-stage activity
PitchBook-NVCA Venture Monitor 
60% of deals over $10M 
US late-stage activity (#) by size
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
12 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Adapting to capital overload: Investors 
chart new paths
Welcome to the era of mega-funds. 
Triggering a capital arms race never before 
seen, nontraditional investors are pushing 
private capital in the innovation economy 
to dizzying levels. Is this good for the VC 
ecosystem? It depends on where you 
operate in the innovation landscape.
We are beginning to see indications 
of how these super-sized funds, with 
capital sourced from across the globe, are 
impacting companies—from the seed and 
early stages to the late stage, and even 
public assets.
Private markets dominate led by SoftBank
Mega-rounds of $100 million+—aka PIPOs—
have outpaced US tech IPOs in every 
quarter over the past four years. Under 
the surface, the source of those private 
investments has changed dramatically. 
Mutual funds and hedge funds have scaled 
back their fervor since 2013–2015, and PE 
seemingly awaits more favorable valuations. 
Still, in 1H 2018, we saw 93 PIPOs—nearly 
matching previous annual totals (see chart). 
This is partly due to SoftBank’s insatiable 
appetite for innovative tech assets, which 
appears to only be growing. In 1H 2018, 
SoftBank led five $100 million+ rounds 
in the US. And in May, Masayoshi Son 
announced that he is planning a second 
mega-fund in the near future. 
Even as more companies seek IPOs in 
2018, it appears the PIPO will continue to 
dominate, allowing today’s best performers 
to stay private much longer than their 
predecessors. With this pattern established, 
how are investors reacting?
Extended horizons at the early stage 
Venture firms are not ceding their territory. 
In fact, the immense global investor 
interest in innovation has allowed the upper 
echelon of VCs to restock their war chests 
with significant capital to ensure continued 
participation, even as their portfolio 
companies raise multiple late-stage rounds. 
Such abundant capital will result in upward 
pricing pressure across the ecosystem, 
impacting classic VC models. Elevated 
valuations make it harder for investors 
to obtain the returns expected from 
an alternative asset class. Indeed, the 
behemoths have created a bifurcated 
market, with the perceived “better” 
companies getting significant attention 
and the rest struggling to raise meaningful 
capital. This environment is leading some 
market observers to speculate that the 
“growth at all cost” mantra of 2014–2015 
could return if top-tier companies accept 
bigger cash infusions than may be 
necessary.
Competition across the late stage
It’s likely competition for late-stage deals 
will intensify. The size and scale of these 
funds often limit their ability to invest in 
early-stage companies, which could drive 
even more capital to chase existing or near-
unicorns. 
The money is flowing from many sources: 
Venture-backed companies raised 2.5x 
the amount that their venture firm 
counterparts received in commitments 
in 2017. The threat of disruption and 
mounting piles of cash are driving 
corporate venture activity. Despite 
rate hikes, mutual fund and hedge fund 
managers are reaching for growth once 
again. And now even sovereign wealth 
funds, some of which are doing direct 
investments, see the potential for extended 
time horizon. 
Impact on the public markets
These mega-rounds often arrive at the 
stage when a company would consider an 
IPO to raise cash—but now they can delay 
it. Many of these mega-rounds provide 
secondary liquidity in addition to primary 
growth capital. The companies that are 
eyeing the public markets in most cases are 
more mature. Public asset managers should 
even be mindful of an adverse selection 
for companies choosing public capital in an 
environment of abundant private cash.
In the long run, it is challenging for public 
investors when private markets capture 
the majority of company value. Between 
2013 and 2015, we saw funds reach for 
growth with mixed results and longer-than-
anticipated holding periods. Perhaps this 
time we’ll see patience on the part of these 
investors.
We live in interesting times, and it is still 
unclear how significantly the mega-funds 
will impact traditional investment patterns. 
Investors who have been investing in 
disruption may be disrupted themselves. 
Steven Pipp, CFA, Research Manager, Silicon Valley Bank
US VC mega-deal activity
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
$18.8$24.6$23.1$25.1$22.285
110
74
106
93
2014
2015
2016
2017
2018*
Deal Value ($B)
# of Deals Closed
West Coast nears $17B in 2Q value 
2Q US VC deal activity by region
Deal value remains concentrated on coasts 
2Q 2018 US VC deal activity by region
PitchBook-NVCA Venture Monitor 
New York sees growing share of deals 
Percentage of total US VC deal count for select MSAs
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018 
West Coast
40.4% of 2Q Deals
62.0% of 2Q Deal Value
Mountain
6.2% of 2Q Deals
3.0% of 2Q Deal Value
Midwest
1.4% of 2Q Deals
0.3% of 2Q Deal Value
Great Lakes
7.9%of 2Q Deals
3.4% of 2Q Deal Value
Mid-Atlantic
20.6% of 2Q Deals
13.3% of 2Q Deal Value
New England
9.8% of 2Q Deals
12.3% of 2Q Deal Value
Southeast
6.5% of 2Q Deals
3.2% of 2Q Deal Value
South
7.0% of 2Q Deals
2.5% of 2Q Deal Value
17.5%
18.7%
11.4%
12.8%
7.1%
8.3%
5.9%
6.6%
7.2%
6.0%
0%
5%
10%
15%
20%
25%
2014
2015
2016
2017
2018*
San Francisco
New York
Boston
San Jose
Los Angeles
Region
Deal Count
Deal Value ($M)
Great Lakes
146
918.2
Mid-Atlantic
383
3,617.5
Midwest
26
72.7
Mountain
116
807.5
New England
182
3,361.3
South
130
694.3
Southeast
121
886.5
West Coast
751
16,912.8
13 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Activity by region
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15 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Activity by sector
0
2,000
4,000
6,000
8,000
10,000
12,000
20082009201020112012201320142015201620172018*Commercial
Services
Consumer Goods
& Recreation
Energy
HC Devices &
Supplies
HC Services &
Systems
IT Hardware
Media
Other
Pharma &
Biotech
Software
Software has dominated deal count 
US VC activity (#) by sector
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
20082009201020112012201320142015201620172018*Commercial
Services
Consumer Goods
& Recreation
Energy
HC Devices &
Supplies
HC Services &
Systems
IT Hardware
Media
Other
Pharma &
Biotech
Software
Pharma & biotech seeing growth in value 
US VC activity ($B) by sector
1,6731,4471,8652,6183,1913,8444,4454,2053,5903,4461,6640%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
20082009201020112012201320142015201620172018*Software Deal Count
Software as % of Total US VC (#)
Software mirrors overall VC trends 
Software as % of total VC (#)
$9.9$7.3$8.3$15.1$13.5$16.2$31.2$31.8$36.5$30.0$23.70%
10%
20%
30%
40%
50%
60%
$0
$5
$10
$15
$20
$25
$30
$35
$40
20082009201020112012201320142015201620172018*Software Deal Value ($B)
Software as % of Total US VC ($)
Over 40% of deal value goes to software 
Software as % of total VC ($)
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
16 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Life sciences
Activity in life sciences sees strong growth 
US VC activity in life sciences
13.3%
14.3%
0%
5%
10%
15%
20%
25%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Sector capturing larger share of deals 
US VC activity (#) in life sciences as percent of total VC
Deal count split between the two sectors 
US VC activity in life sciences (#) by sector
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$50M+
$25M-
$50M
$10M-
$25M
$5M-
$10M
$1M-
$5M
Under
$1M
Following trend, deal sizes getting larger 
US VC activity in life sciences (#) by size
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
0
200
400
600
800
1,000
1,200
1,400
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Pharma & Biotech
HC Devices & Supplies
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
$9.3$7.9$7.7$8.6$8.7$9.7$12.4$14.7$12.5$17.2$12.60
200
400
600
800
1,000
1,200
1,400
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
20082009201020112012201320142015201620172018*Deal Value ($B)
# of Deals Closed
17 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Life science investing is through the 
stratosphere. Why now?
We have the privilege of living through a 
renaissance in the life science sector—a 
time where the word “cure” will increasingly 
replace the word “treatment” in a number 
of indications. There is no single factor 
driving the current momentum, and what 
is often forgotten is that some of the 
most transformative innovations (whether 
CRISPR or CAR-T) leveraged decades of 
advances across the landscape and relied 
on largely uncelebrated research quietly 
conducted in both academia and industry. 
What is unique today is that we increasingly 
have new research tools and analytical 
capabilities, including the nascent entry 
of artificial intelligence (AI) and machine 
learning (ML) to help us understand the 
true biology behind disease. Sequencing 
has certainly played a big role, as the cost 
per gigabyte of data has plummeted over 
the past decade. But sequencing is not the 
whole story—it may tell us where to go, but 
other innovations are giving us something 
to do once we get there.
Clinical breakthroughs are benefiting 
patients and investors alike, leading to 
increased capital in the sector and more 
entrepreneurs willing to challenge the 
realm of the possible. The torrid pace 
of investing and company formation 
in 2017 resulted in $9.1 billion raised 
by venture capitalists and $17.3 billion 
in VC investment across the healthcare 
sector. Healthcare venture fundraising 
in 2018 is on pace to closely match 2017, 
and investments likely will surpass last 
year’s total. This activity combined with 
a collaborative FDA environment (2017 
marked a 21-year high for novel drug 
approvals at 46, and another 16 have won 
approval in the first half of 2018) is making 
for a very favorable climate for innovation 
and continuing to draw capital into the 
sector.
What is driving the wave of biopharma 
IPOs?
Beginning in 2014, we saw a pronounced 
increase in buy-side institutional appetite 
for life science companies in the public 
markets, with the number of venture-
backed biopharma IPOs more than 
doubling. A number of life science and 
healthcare venture firms realized portfolio 
returns, helping establish the foundation 
for strong fundraising in the years that 
followed. Drawn to healthy returns, 
crossover investors (public investors 
investing in the last private round before an 
IPO) have played an increasingly dominant 
role in the public market story. Already, 30 
biopharma IPOs have priced in the first half 
of 2018.
How long will it last?
Without question, the economy will have 
its ups and downs, IPO windows will open 
and close, and there will be no shortage of 
factors that could lead to exogenous shocks 
to the market. If you step back, though, 
you realize that the innovations taking 
place today go well beyond short-term 
markets; they are going to change how 
disease is treated for generations to come. 
In the history of humanity, we are the first 
generation to understand the structure of 
DNA. Just 15 years ago, we sequenced the 
genome; and just five years ago, we learned 
how to rewrite it. We are living through the 
first generation of gene/cell therapy drugs 
(Biogen’s Spinraza, Sarepta’s Exondys 51, 
Novartis’ and Gilead’s CAR-T therapies and 
Spark’s Luxturna, to name a few). These 
new therapeutic platforms may bring with 
them a resilience that over the longer term 
will be less susceptible to yield curves and 
market volatility.
Give us a preview of the most exciting 
advancements across the sector.
Areas like AI and ML are early in their 
healthcare journey. Their promise of 
amplifying the crowd’s wisdom will have 
profound applications in drug discovery, in 
delivery of care and eventually in creating 
a more sustainable health economic model. 
Research boom in life sciences benefiting 
patients and investors alike 
Q&A with David M. Sabow, Group Head of Life Sciences, Client Funds and Bank Products, Silicon Valley Bank
The life sciences sector has grown immensely in the US, with deal value topping $17 billion during 2017, with more than $12.5 billion invested already 
this year (21.4% of total US VC deal value). Not only has this investment helped these companies reach private valuations never before seen in 
this industry, but research capabilities have been greatly increased. New technologies, especially those common among other VC-heavy industries 
(artificial intelligence, machine learning, etc.) are helping researchers and academics make ground-breaking discoveries at breakneck speed. In this 
edition, we talked to David M. Sabow, Group Head of Life Sciences, Client Funds and Bank Products at Silicon Valley Bank about how he sees 
investment in life sciences playing out, and what’s next for the industry. 
For 35 years, Silicon Valley Bank (SVB) has helped innovative companies and their investors move bold ideas forward, fast. SVB provides targeted financial services 
and expertise through its offices in innovation centers around the world. With commercial, international and private banking services, SVB helps address the 
unique needs of innovators. Learn more at svb.com. 
©2018 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are 
trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the 
California bank subsidiary of SVB Financial Group (Nasdaq: SIVB).
18 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
On the biopharma side, we will see off-
the-shelf cell therapies replace the current 
autologous first generation CAR-T. We will 
also see new treatments in the incredibly 
difficult neurodegenerative space—
expanding our understanding of these 
indications and using novel approaches that 
lead to synaptic regeneration. Profound 
advances in data analytics, biomarker 
discovery, remote patient monitoring, 
diagnostics for earlier intervention and the 
delivery of care are just a handful of the 
factors converging to drive the industry 
forward.
On the investing side, increasingly we 
will see novel corporate structures 
designed to build a portfolio of assets with 
low-correlation risk in early-stage drug 
development. With incredible advances 
in understanding the specific mechanisms 
behind disease, there is a higher probability 
of clinical success and by extension a more 
predictable return for investors. Imagine 
a time when each 401(k) had a portion 
allocated to early-stage drug development—
that may be exactly where we are headed.
Which life science subsectors are getting a 
lot of interest, and which are underfunded?
Oncology is advancing faster than ever, 
driven by cellular therapies, immuno-
oncology and a focus on the heterogeneity 
of disease, leading to more-effective 
personalized treatment. In 2016 and 
2017, oncology received twice as much 
investment compared with the next closest 
indication. And this may not correct 
anytime soon, as these investors have been 
well-rewarded, with oncology providing a 
large share of life science big exits. A key 
opportunity for the industry is to apply 
the lessons and advances of the oncology 
revolution to other challenging areas such 
as neurodegenerative diseases.
Diagnostics and tools companies continue 
to see a flood of capital, notably from 
technology investors, with a plethora 
of private $100 million+ equity rounds 
since 2015. There are some exciting 
advancements, including new tools for 
synthetic biology, AI and ML for diagnostics 
and clinical decision-making and, of course, 
the promise of liquid biopsy for earlier 
intervention and better monitoring.
The device sector has been nearly absent 
from the IPO bonanza and is receiving 
significantly less than half of the venture 
investment we are seeing in biopharma. 
Despite this, the sector has experienced a 
stable M&A market over the past several 
years. Truly innovative device companies 
(De Novo 510(k) and premarket approval 
pathways) have realized upfront M&A 
returns on par with biopharma and three 
neuro-focused companies went public in 
the first half of 2018. Longer term, the 
device subsector will benefit from the 
convergence of technology, leveraging 
microelectronics, digital health platforms 
and patient engagement tools to eliminate 
the use of drugs in a number of chronic 
conditions.
SVB co-hosts a China healthcare summit 
each September in Shanghai. Tell us how 
the life science climate is changing there.
Healthcare executives on both sides 
of the Pacific now recognize that being 
conversant in the Sino/US opportunity is 
a strategic imperative rather than merely 
good cocktail fodder. There are several 
drivers behind this trend. At the highest 
level, the vastly different healthcare 
challenges facing the US and China pose 
a unique opportunity for collaboration. 
While the US is focused on reducing 
healthcare costs from the whopping 17.5% 
of gross domestic product, China is poised 
to significantly increase its healthcare 
spending from current levels of 6.2% of 
GDP. Getting the health economics model 
wrong would be magnified exponentially 
across China’s huge population. By focusing 
on consumer engagement in wellness 
for disease prevention, investing in early 
disease detection and closely monitoring 
the cost of treatments and medical devices, 
the Chinese government seems determined 
not to follow the same path that led to the 
economic challenges of the US healthcare 
system.
China is also at the front end of a market 
transition, evolving from “Made in China” 
to “Created in China.” Economic (a growing 
middle class) and demographic (a surge 
in aging population) drivers are fueling 
the demand for innovative healthcare 
products and solutions to address the 
increased incidence of disease, including 
cancer, hypertension, diabetes, and 
cardiovascular and respiratory diseases. 
Lastly, Chinese corporates are increasingly 
using innovation and deal-making to make 
up for the legacy innovation gap. Domestic 
Chinese pharma companies spend a mere 
approximate 2% to 4% of their total sales 
on research and development, compared 
with closer to 15% for multinational 
companies. This gap is poised to narrow 
as select corporates move from lower-
margin generics in favor of higher-margin 
innovative therapies.
David Sabow serves as the head of Silicon Valley Bank’s life science and healthcare 
practice, as well as the group head for the Bank’s client funds and products 
businesses. David manages life science and healthcare deal teams across the 
country, is responsible for the Bank’s on and off balance sheet deposit strategy 
and is the executive lead for the Bank’s products. David frequently presents at 
global industry conferences, has been a guest lecturer at Northeastern University’s 
Nanomedicine Graduate program, and has been published in Forbes for his insight 
on trends impacting China’s life science and healthcare market.
Prior to joining SVB, David spent nine years in the life science investment 
banking practice at Canaccord Genuity, where he participated in public 
financings and M&A transactions. While at Canaccord, David worked on both 
domestic and international transactions across the spectrum of life science and 
healthcare. Outside of work David is the co-chair of the Kelly Brush Foundation’s 
Inspire!Boston event, and is a member of the Board of Advisors for Beth Israel 
Deaconess Hospital—Needham. David completed the executive program at 
Dartmouth’s Tuck School, focusing on Leadership and Strategic Impact. He 
graduated with distinction from Santa Clara University and lives in Needham, 
Massachusetts.
©2018 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. SVB, SVB FINANCIAL GROUP, 
SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. 06.22.18
For 35 years, Silicon Valley Bank has been at the intersection of innovation 
and capital. We provide unique access to insights and strategies for companies 
of all sizes in innovation centers around the world — all designed to help you 
find what’s next.
svb.com
Helping life science and 
healthcare innovators
move bold ideas forward, fast. 
CVC participation in venture deals has 
continued at a brisk pace in 2Q, with total 
deal value topping $13.5 billion, only 
slowing slightly from the pace in 1Q. CVC 
activity is in line with the broader VC trend 
of capital concentration exhibited through 
declining deal count and increasing deal 
size. Although total deal value is up 104% 
YoY, deal count is down 4%.
For the past five years, CVCs have steadily 
invested in fewer deals smaller than $5 
million and shifted toward larger check 
sizes, increasing participation in deals 
sized over $25 million. Additionally, nearly 
20% of CVC deals (by count) are invested 
in rounds sized $50 million or greater. As 
corporations have adapted to increasing 
competition from agile startups, they 
have become more willing to engage 
with those startups directly, whether 
through partnerships, acquisitions or CVC 
investments. As corporations become more 
comfortable using VC as a tool to promote 
innovation and enhance competitive 
advantage, we expect to see continued 
participation by CVCs in large rounds.
The software and life sciences sectors 
continue to receive increased focus from 
CVCs. Together, software and life sciences 
have received 62% of CVC deal count YTD. 
These sectors have increased steadily from 
46% of deal activity a decade ago. We 
expect this trend to continue as established 
healthcare and biotech firms see VC as a 
viable means of engendering innovation 
and new product development. VSP Global, 
a vision care health insurance company, 
recently invested in NeuroVision Imaging, 
a startup developing technology to detect 
Alzheimer’s Disease. The investment 
furthers VSP’s mission of highlighting “the 
critical role the eye doctor plays within an 
20 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Corporate VC
CVC pacing for record year 
US corporate VC participation activity
45.2%
48.3%
15.8%
17.6%
0%
10%
20%
30%
40%
50%
60%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
CVC % of VC Deal Value
CVC % of VC Deal Count
CVC participating in 50% of deal value 
Percentage of activity that includes CVC participation
238 
105 
663 
327 
496 
273 
0
100
200
300
400
500
600
700
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Angel/Seed
Early VC
Late VC
CVC activity balanced across stages 
CVC investment activity (#) by stage
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
$10.3$6.6$8.0$13.5$12.2$15.2$27.6$37.2$35.3$37.0$27.8702
501
574
738
868
1,095
1,352
1,478
1,376
1,397
705
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Deal Value ($B)
# of Deals Closed
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
increasingly integrated healthcare system.” 
An active CVC strategy allows healthcare 
and biotech firms to further innovation 
objectives and reduce R&D costs 
significantly by focusing time and capital 
on funding technologies that have shown 
positive medical results.
One important contributing factor that 
can help to sustain the rise in CVC is the 
passage of US tax reform in late December 
of 2017. The reform will impact companies 
in several ways. First, a reduction in the US 
corporate tax rate from 35% to 21% will 
be a boon for firms’ free cash flow (FCF), 
providing corporations with additional 
capital to direct into CVC investments. 
Indeed, just six months after tax reform was 
enacted, we are now seeing firms such as 
Lockheed Martin publicly cite tax reform in 
press releases in regards to increased CVC 
activities. Lockheed responded to the tax 
reform by increasing dedicated CVC capital 
by $100 million. The firm’s most recent 
investment was into Mythic, a local artificial 
intelligence platform. Cash repatriation 
presents an additional opportunity for 
CVC participation. New tax policies reduce 
penalties for repatriating earnings, freeing 
up cash to be invested in VC. Going 
forward, we expect corporate R&D spend 
and investment to accelerate in anticipation 
of future tax savings. 
21 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Large deals account for higher count 
US corporate VC activity (#) by deal size
CVC present in many of largest deals 
US corporate VC activity ($) by deal size
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$50M+
$25M-
$50M
$10M-
$25M
$5M-
$10M
$1M-
$5M
Under
$1M
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$50M+
$25M-
$50M
$10M-
$25M
$5M-
$10M
$1M-
$5M
Under
$1M
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
0
200
400
600
800
1,000
1,200
1,400
1,600
20082009201020112012201320142015201620172018*Commercial
Services
Consumer Goods
& Recreation
Energy
HC Devices &
Supplies
HC Services &
Systems
IT Hardware
Media
Other
Pharma &
Biotech
Software
Software hits plateau over recent years 
US corporate VC activity (#) by sector
Software deal value has declined 
US corporate VC activity ($B) by sector
$0
$5
$10
$15
$20
$25
$30
$35
$40
20082009201020112012201320142015201620172018*Commercial
Services
Consumer Goods
& Recreation
Energy
HC Devices &
Supplies
HC Services &
Systems
IT Hardware
Media
Other
Pharma &
Biotech
Software
22 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
It’s undeniable that the US venture 
industry has evolved, maybe more so 
in the past several years than during 
any time previously. In the past, a $100 
billion investment fund providing late-
stage capital was unthinkable, and capital 
was provided by fewer sources, limiting 
potential conflicts of interest between 
investor types. These days, however, there 
is more private capital available than ever, 
and companies are continuing growth 
much longer than before, postponing even 
the thought of an exit. These changes call 
for adaption from all sides, and, for those in 
a consultative relationship to the industry, 
an everchanging storyline of advice that 
can be modified to fit not only the shifting 
environment, but also the evolving role 
of companies and technologies within the 
market. 
Consultative relationships should begin at 
the very earliest stages of venture when 
the near-term decisions have the greatest 
effect on long-term direction of the 
company. Cultivating this relationship with 
trusted service providers can be essential in 
helping navigate the current environment. 
Before the industry was as crowded with 
entrepreneurs and investors as it is today, 
raising initial capital was a less arduous 
task, with just three main sources of capital: 
friends and family, angels, and the more 
traditional early-stage venture investors. 
These sources offered entrepreneurs with 
plenty of opportunity to raise relatively 
simple capital, largely limiting complicated 
deal terms and offering entrepreneurs 
the chance to hold onto large amounts of 
their company. Today, there has been a 
trifurcation of the early stage leading to 
distinct phases—pre-seed, seed and Series 
A. Much of this is due to incoming investor 
types causing early capital raising to appear 
differently than in the past. 
It is not uncommon now for companies 
entering seed or Series A to have already 
raised millions. To go along with the 
traditional capital sources, accelerators 
have exploded within the industry to fund 
nascent ideas and burgeoning startups. 
Family investment offices, too, have crept 
into earlier investments looking to maintain 
and grow their wealth while adding fuel 
to the fire of young startups. While each 
of these are great sources for capital and 
mentorship, the addition of more investors 
and larger amounts of capital so early in 
the company’s lifecycle can complicate the 
structure of the cap table down the line, 
especially if protective terms or first rights 
provisions are included in deals early on in 
the company’s lifecycle. The caution with 
adding several different types of investors 
is simply to make sure that all interests 
are aligned for the company. Conflicts can 
arise down the line, complicating an exit or 
adding difficulty to raising further capital. 
Buddy Arnheim, Partner, Emerging Companies and Venture Capital, Perkins Coie
An evolving VC market needs evolving 
participants
Median deal sizes continue upward guidance 
Median deal size ($M) by series
With more than 1,000 lawyers in 19 offices across the United States and Asia, Perkins Coie represents great companies across a wide range of industries 
and stages of growth—from startups to FORTUNE 50 corporations. Attorneys in our Emerging Companies and Venture Capital practice offer one of the 
premier legal resources in the nation for venture-backed companies that have IP as a key value driver. Our clients turn to us for guidance on company 
formation, IP protection and enforcement, financings, corporate governance, technology transactions, product counsel, and mergers and acquisitions, to 
name a few of the legal areas on which we focus. We also represent investors as they make, manage and divest investments in diverse industries. Learn 
more at perkinscoie.com and startuppercolator.com.
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
$1.6
$2.1
$6.0
$8.0
$14.0
$16.5
$22.0
$27.0
$32.1
$50.0
$0
$10
$20
$30
$40
$50
$60
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Seed
Series A
Series B
Series C
Series D+
23 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Perkins Coie LLP   Attorney Advertising
ARTIFICIAL INTELLIGENCE, MACHINE 
LEARNING AND ROBOTICS
Let’s chat 
about AI.
OUR EMERGING COMPANIES 
& VENTURE CAPITAL TEAM 
includes technology lawyers 
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development and integration of 
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We also represent investors as 
they make, manage and divest 
investments in this space.
To learn more, visit
PerkinsCoie.com/AI 
The growth of the early stage has sent a 
relative shockwave effect through the 
rest of the venture lifecycle. For one, 
more is expected of companies to receive 
investment. Many early-stage companies 
now have revenues to show investors and 
a more scalable business model, earlier on 
in their development than in the past. A 
correct pathway to success is now more 
important than ever, and early success can 
make or break even the best ideas and 
technologies. 
Beyond capital financing, the lengthening 
time to exit poses more challenges for 
companies with venture backing. This, too, 
may be the most important area in which 
advice from outside providers in a close 
relationship should be sought. Though 
the IPO window is “open,” tech companies 
are not turning toward an IPO until much 
later into their lifecycles. The illiquidity 
of compensation tied to employment has 
become a major hazard in retaining talent. 
Within major tech areas, a battle has begun 
against attrition, as employees move 
through mid-management at late-stage 
companies to more attractive option plans 
or seek a higher title at a younger tech 
startup. Liquidity is a growing struggle, 
with fewer companies than ever before 
completing an IPO at a valuation less than 
$500 million and, in turn, spending much 
more time growing privately. Finding 
liquidity for employees and early investors 
can take away from the longer-term vision 
of the company, straining already thinly 
spread time from c-level employees. But 
retaining top talent can be essential to 
bring the collective vision of leadership to 
fruition. The reason companies have been 
able to delay potential exits is simple. The 
amount of capital available for late-stage 
deals is higher than it has ever been. Public 
investors have helped to fill the needs of 
these growth companies at the top end of 
the market by simply getting into private 
deals at the time of the company’s lifecycle 
during which companies would have more 
traditionally entered the public market.
Many early-stage companies now have 
revenues and a more scalable business 
model to show investors earlier on in 
their development than in the past. 
Consultative advice from service providers 
that have facilitated deals in the changing 
environment are an essential source for 
advice and strategic planning. Outside 
advice and consultation can relieve some of 
the pressures facing startups in this ever-
changing industry. Piloting a young startup 
or even a seasoned late-stage company is 
difficult and shouldn’t be burdened by a 
single executive or small team. 
Exit timelines remain lengthened for all exit types 
Average time to exit (years) by type
5.9
5.6
6.9
6.3
7.7
7.4
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2010
2011
2012
2013
2014
2015
2016
2017
2018*
Acquisition
IPO
 Buyout
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
24 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Growth equity
$8.0$5.6$5.1$4.8$4.2$5.2$8.5$3.9$6.8$4.4$5.5$4.7$8.9$11.3$8.4$11.0$11.3$10.2$12.8$9.5$11.2$13.3$6.1$8.5$6.4$11.8$15.1$9.3$15.6$12.10
50
100
150
200
250
300
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2011
2012
2013
2014
2015
2016
2017
2018
Deal Value ($B)
# of Deals Closed
Capital available to companies at the latest stages 
US growth equity activity
2018 set for record year after two large quarters 
US growth equity activity
PitchBook-NVCA Venture Monitor 
$19.2$10.9$18.4$23.5$21.8$21.4$39.5$43.7$39.2$42.7$27.7567 
386 
528 
614 
641 
639 
851 
924 
806 
872 
526 
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Deal Value ($B)
# of Deals Closed
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
Growth equity, an interesting hybrid of PE 
and VC, has become a much more crowded 
space. With a steady stream of more 
mature companies flowing through the 
private markets, non-VCs like corporations, 
PE firms and other institutional investors 
are seeking to access the growth potential 
that these large private companies often 
promise. In the second quarter, growth 
equity participation represented $12.1 
billion of capital invested, coming in higher 
than the five-year average for capital 
invested and continuing the strength 
from 1Q. This uptick in growth activity 
has paralleled increased buyout activity of 
VC-backed businesses, as PE firms look 
to source enough deals to deploy the 
mountains of dry powder that have built up 
over the past decade.
The ability of this stage to finance mega-
rounds has blossomed in the last few years, 
and with fundraising sitting at historically 
high levels and the dry powder build-up, 
this trend will likely survive for years to 
come. This has also meant that private 
markets have become a viable alternative 
to the public markets’ financing function. 
This can be seen by the amount of capital 
invested into the growth stage and by 
the amount of $100 million+ deals—the 
historic fundraising milestone at which 
point companies would’ve looked to public 
market investors. Through the first half of 
2018, we have recorded 65 deals of this 
size, which represents 75% of the 2017 
full-year total and exceeds 2016’s total  
of 60 deals.
25 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
$40.0
$45.0
$158.2
$180.0
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Median Deal Size ($M)
Median Pre-money Valuation ($M)
Not shying away from high valuations 
Median growth equity deal size and pre-money valuation ($M)
Sector trends remain stable 
US growth equity activity ($) by sector
22% of deals above $100M 
US growth equity activity (#) by size
Deals of $200M+ represent 37% of value 
US growth equity activity ($) by size
Growth equity pacing for record 
year in both deal count and deal 
value in the US
Growth equity investors have 
been a major reason that 
companies are able to stay 
private longer before an exit
0
100
200
300
400
500
600
700
800
900
1,000
20082009201020112012201320142015201620172018*Commercial
Services
Consumer Goods
& Recreation
Energy
HC Devices &
Supplies
HC Services &
Systems
IT Hardware
Media
Other
Pharma &
Biotech
Software
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$200M+
$100M-
$200M
$75M-
$100M
$50M-
$75M
$30M-
$50M
$15M-
$30M
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$200M+
$100M-
$200M
$75M-
$100M
$50M-
$75M
$30M-
$50M
$15M-
$30M
26 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Nontraditional investors, family offices 
seek earlier-stage deals
The rush of nontraditional VCs into the 
innovation economy is creating new 
paradigms for earlier-stage investing. Since 
the financial crisis, we have seen enormous 
growth in invested capital by these 
investors, notably, family offices, sovereign 
wealth funds and mutual funds.
These nontraditional investors want not 
only access to the best companies but 
also a front row seat to innovation and 
the entrepreneurs who are shaping the 
future. The value-add from each group 
varies as well. For example, mutual funds 
are sophisticated investors that can help 
position a company for a potential IPO. 
Family offices often have entrepreneurial 
DNA and can provide patient capital that 
scales with founders and venture firms over 
the long-term. Sovereign funds often look 
to diversify their economies and hopefully 
bring innovation back to their home 
country.
Spurred by rising valuations and growing 
investor sophistication, nontraditional 
investors are investing at earlier stages. 
Many mutual funds, which typically 
invested post-IPO, now see that significant 
value can be realized when the company is 
still private. 
Series D+ still captures the most activity 
in terms of capital and deal count by 
nontraditional investors, but Series B deal 
counts are seeing the fastest growth since 
2016, increasing 35%. Interest in the seed 
stage has also grown, and now 16% of seed 
deals involve a nontraditional investor, a 
15% increase since 2016. Angel & seed 
investments are larger than ever and have 
been buoyed by abundant capital as these 
investors are looking to invest in high-
growth technology companies. The growth 
of nontraditional investments is helping to 
dramatically change the startup fundraising 
timeline.
The rise of the family office
One type of investor making waves at 
the earlier end of the spectrum is the 
family office. Family offices are not new 
to venture. In fact, they backed some of 
Silicon Valley’s early venture pioneers. 
Their impact on the early-stage ecosystem, 
though, has never been greater. Half of all 
the family offices in the world have been 
created in the past 15 years, and many of 
those families want access to innovation, 
technology and emerging managers. As 
their appetite for VC grows, family office 
managers are seeking new strategies, 
including both making direct investments 
and building relationships with emerging 
managers to gain insight and access to 
technology deals. These managers help 
family offices navigate the market and 
can introduce them to direct investment 
opportunities that have already been 
scrubbed by the VCs. Family offices are also 
starting to follow in the footsteps of large 
institutional investors, focusing on building 
long-term partnerships with managers and 
evaluating investment performance across 
multiple funds.
Direct VC/PE or co-investing makes 
up 13.2% of the typical family office 
portfolio, according to the Global Family 
Office Report 2017, and almost 70% of 
family offices engage in direct investing. A 
majority of family office money invested 
in recent years has been funneled toward 
IT, with more than 97% of this investment 
in the software space. Family offices also 
have been involved in notable late-stage 
VC deals in recent years, including Uber, 
Robinhood, Adyen and Instacart.
What does the future look like for 
family offices and other nontraditional 
investors? They are becoming increasingly 
institutionalized as they build better 
processes for evaluating companies and 
funds to leverage for their unique value-
add. They are hiring connected people who 
have networks and experience in private 
company investing, and their continued 
growth and participation in the innovation 
economy is providing another source 
of capital to help tech and life science 
companies invent the future.
Jim Marshall, Head of Emerging Manager Practice, Silicon Valley Bank
14.0%
16.7%
23.9%
28.1%
35.0%
41.8%
42.7%
43.8%
49.3%
60.4%
0%
10%
20%
30%
40%
50%
60%
70%
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018*
Seed
Series A
Series B
Series C
Series D+
Over 60% of US Series D+ deals include nontraditionals 
Percentage of overall US VC activity with nontraditional investor participation by series
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
27 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Exits
$8.7$8.8$7.8$8.6$6.9$17.0$11.7$10.4$3.8$8.8$11.2$13.0$13.7$11.2$18.3$36.7$8.6$10.1$16.5$15.2$17.1$16.7$16.0$9.4$15.9$12.7$12.4$12.9$15.7$12.90
50
100
150
200
250
300
350
$0
$5
$10
$15
$20
$25
$30
$35
$40
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2011
2012
2013
2014
2015
2016
2017
2018
Exit Value ($B)
# of Exits Closed
$16.2$16.3$30.6$33.8$46.0$36.8$79.8$50.4$59.2$54.0$28.7484 482
697
738
869
893
1,073
1,012
879
853
419
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Exit Value ($B)
# of Exits Closed
Exit value strong as activity stabilizes 
US VC-backed exit activity
12 of past 13 quarters have realized over $10B in exit value 
US VC-backed exit activity
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
As hold times and valuations continue to 
extend across the board, the health of the 
exit market grows in importance. So far in 
2018, we’ve seen some encouraging signs 
with a strong first half of exit value and 
steady valuation step-ups at exit. With 
$28.7 billion of exit value closed through 
the first six months, 2018 is pacing to top 
$50 billion for the fifth straight year.
IPOs have been a bright spot in the exit 
market, with activity primed to closely 
match last year’s levels on both a count and 
value basis. This quarter was headlined by 
eight companies debuting at a valuation 
over $1 billion, with DocuSign and 
Pluralsight topping that list. At least one 
highly anticipated IPO was scrapped, with 
Adaptive Insights purchased by Workday 
for $1.55 billion—more than double the 
$627 million at which they were planning 
to price the IPO. This complemented some 
of the high-profile IPOs that capped off an 
exceptionally strong quarter for enterprise 
software exits, which we expect to, in turn, 
drive increased deal activity in the space as 
that capital is re-allocated.
While pharma & biotech IPO activity 
usually makes up a majority of the IPO 
count, the industry had an especially robust 
June with 15 companies pricing, including 
a record of 6 on a single day. Recent 
strength in the public markets and investor 
familiarity with the biotech business model 
has pushed the IPO window wide open, 
and VC-backed companies are taking 
advantage of the opportunity. In turn, 
this could spur more activity by corporate 
acquirers as they might look to pull the 
trigger and acquire a company before they 
have a chance for a public listing to avoid 
paying a premium on their public shares. 
Corporate acquirers also have tailwinds 
from the recent passage of tax reform 
legislation, which we expect to lead to an 
28 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*Acquisition
IPO
Buyout
Buyouts still growing 
US VC-backed exit (#) by type
Exit sizes among all types grow  
Median US VC-backed exit size ($M) by type
Over 50% of exits above $100M  
US VC-backed exit activity (#) by size
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
$83.0
$95.0
$76.0
$108.0
$125.0
$162.5
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Acquisition
IPO
Buyout
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$500M+
$100M-
$500M
$50M-
$100M
$25M-
$50M
Under
$25M
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$500M+
$100M-
$500M
$50M-
$100M
$25M-
$50M
Under
$25M
Exits under $50M represent <10% of value 
US VC-backed exit activity ($) by size
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
uptick in M&A transactions in the short-
term.
Alternative exits, particularly direct 
secondary transactions and special purpose 
acquisition companies (SPACs), are areas 
we expected to see have increased 
activity throughout 2018 and beyond. 
In June, we saw TPG announce its new 
Tech Adjacencies Fund, which is seeking 
$1.5 billion to target direct secondary 
opportunities, expanding its growth stage 
strategy into new areas. This trend is 
predicated on the fact that companies are 
raising a larger number of VC financings 
and delaying exits, as VC capital availability 
allows rounds at virtually any amount. 
While there have been some encouraging 
signs from the IPO market, the costs of 
operating as a public company still loom 
as deterrents for many large VC-backed 
companies. The second quarter contained 
both Spotify’s unorthodox public listing as 
well as a few more SPAC debuts, providing 
further evidence that alternatives are likely 
here to stay and even more likely to evolve 
over the coming years as the current market 
cycle plays out. 
29 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Fundraising
$31.7$12.1$19.8$25.7$24.4$21.1$36.2$36.8$41.1$34.6$20.2193
124
156
155
208
227
297
295
322
283
157
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Capital Raised ($B)
# of Funds Closed
Contrary to belief, fundraising shows no sign of slowing 
US VC fundraising activity
Fund sizes trending larger 
US fundraising activity (#) by size
Median fund size reaches 10-year high 
Median and average fund size ($M) 
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
After a slow start to fundraising in 2018, 
2Q saw an uptick in activity. VCs closed 
72 funds with a total of $10.8 billion raised 
during the quarter. This brings both fund 
count and capital raised in 2018 on pace to 
surpass 2017 totals. The number of micro-
funds (funds sized $50 million or smaller) 
has declined slightly in 2018, but we expect 
this category to rebound in the second 
half of the year as a number of open funds 
approach their target sizes. In the $100 
million-$500 million range, capital raised 
has increased at a faster pace than other 
segments. Successful closings of funds in 
this bucket have increased from 40% of 
total capital raised in 2014 to 56% in 2018. 
This trend likely ties to elevated valuations 
of seed-stage startups, driving VCs to raise 
larger funds. According to recent PitchBook 
analysis, larger funds have proven to 
provide greater returns. These market 
factors, in addition to outsized returns, are 
providing sufficient incentive for LPs to 
continue to support VCs as they raise ever 
larger funds.
The seed-stage ecosystem has gone 
through significant transformations over 
the past several years. Whereas seed 
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201020112012201320142015201620172018*$1B+
$500M-
$1B
$250M-
$500M
$100M-
$250M
$50M-
$100M
Under
$50M
$50.0
$65.0
$134.5
$141.0
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Median
Average
investments were initially made into 
startups at the earliest lifecycle stages, 
the “seed” label has evolved to include 
companies that have achieved impressive 
levels of traction and product development. 
The potential for high returns has attracted 
numerous new investors, including angels, 
CVCs and VC funds. With rising deal sizes 
and valuations, some seed-stage VCs have 
been faced with a dilemma: Do they raise 
larger funds to stay competitive, or do they 
exit the seed market entirely? LVRHealth, 
30 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
First-time funds keep good times rolling in 1H 
US first-time fundraising activity
Micro-funds pacing for record value 
US micro fundraising activity
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
after raising four sub-$20 million funds, 
decided to raise a fifth fund at $100 million. 
Arena Ventures has chosen the latter 
option, pausing seed investing activities 
“until the seed market corrects.” We expect 
inflated valuations and larger seed funds 
to continue as greater amounts of capital 
continue to be directed into early-stage 
companies.
Another significant trend is the decrease 
in mega-funds ($1 billion+) raised. Total 
mega-fund funding has declined from 
$11.4 billion in 2014 to $6.8 billion in 
2017. Thus far, 2018 appears to be in 
line with previous years; however, seven 
open mega-funds could reverse this trend. 
Serpent Venture Capital is raising the 
largest fund, with a minimum fund size of 
$7 billion. If all seven vehicles close this 
year, it would bring total mega-fund capital 
closed in 2018 to a new high of $23.28 
billion. The rise in mega-funds is providing 
a much-needed destination for the plentiful 
LP capital available in the market. Elevated 
aggregate distributions to LPs and positive 
aggregate net cash flows are driving 
larger investments. The capacity to write 
large checks will exacerbate the trend of 
unicorns retaining private status for longer. 
Lastly, we believe many of these funds are 
taking an approach similar to SoftBank’s 
Vision Fund, adopting a meta-view and 
attempting to capitalize on mega-trends 
affecting entire industries.
$3.1$1.1$0.7$1.9$1.6$1.5$1.9$2.3$2.5$3.8$1.80
10
20
30
40
50
60
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 2018*
Capital Raised ($B)
# of Funds Closed
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
$1.2$0.8$1.1$1.2$1.6$1.8$1.9$1.7$2.0$2.0$1.10
20
40
60
80
100
120
140
160
180
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 2018*
Capital Raised ($B)
# of Funds Closed
1.2x
1.0x 1.0x
1.1x
1.2x
1.2x
1.2x
1.3x
1.2x
1.4x 1.4x
0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
1.4x
1.6x
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Firms raising larger follow-on funds 
Median US VC follow-on fundraising step-up multiples
Follow-on fund pace slowing slightly 
Median time (years) between funds
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
3.6
3.8
3.7
3.5
3.7
3.6
2.8
2.5
2.7
2.7
2.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
PitchBook-NVCA Venture Monitor 
*As of June 30, 2018
See how the PitchBook Platform can 
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32 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
2Q league tables
Plug and Play Tech Center
25
SOSV
17
Alumni Ventures Group
12
Innovation Works
11
Founder Collective
7
Slow Ventures
7
Social Capital
7
True Ventures
7
Astia Angels
6
Founders Fund
6
Abstract Ventures
5
Right Side Capital Management
5
Sinai Ventures
5
Y Combinator
5
8VC
4
Capital Factory
4
ChinaRock Capital Management
4
Foundation Capital
4
Hyde Park Venture Partners
4
Keiretsu Capital
4
Kickstart Seed Fund
4
LaunchCapital
4
Liquid 2 Ventures
4
M25
4
Precursor Capital
4
Princeton Alumni Entrepreneurs 
Fund
4
Rockies Venture Club
4
Social Starts
4
SV Angel
4
Most active investors 
angel/seed
Most active investors 
early stage
Most active investors 
late stage
SOSV
17
Plug and Play Tech Center
16
Kleiner Perkins Caufield & Byers
14
New Enterprise Associates
12
Alumni Ventures Group
11
Founders Fund
10
General Catalyst
10
Andreessen Horowitz
8
First Round Capital
8
GV
8
Intel Capital
8
Lux Capital
8
Y Combinator
8
Canaan Partners
7
Elevate Ventures
7
Greycroft
7
Keiretsu Forum
7
Khosla Ventures
7
RRE Ventures
7
ARCH Venture Partners
6
Invest Michigan
6
Lightspeed Venture Partners
6
Social Capital
6
SV Angel
6
True Ventures
6
Upfront Ventures
6
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
Kleiner Perkins Caufield & Byers
15
New Enterprise Associates
14
Alumni Ventures Group
12
Andreessen Horowitz
9
Bessemer Venture Partners
9
Accel
8
Menlo Ventures
8
F-Prime Capital Partners
7
General Catalyst
7
GV
7
Intel Capital
7
Sapphire Ventures
7
Venrock
7
Bain Capital Ventures
6
IVP
6
Khosla Ventures
6
Lightspeed Capital Partners
6
Sequoia Capital
6
Battery Ventures
5
Castor Ventures
5
Greylock Partners
5
Charles River Ventures
5
M12
5
Salesforce Ventures
5
Spark Capital
5
SV Health Investors
5
Thrive Capital
5
Upfront Ventures
5
PitchBook-NVCA Venture Monitor 
33 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Select largest US VC deals in 2Q 2018
Select largest US VC funds closed in 2Q 2018
Select largest US VC-backed IPOs in 2Q 2018
Select largest US VC-backed acquisitions in 2Q 2018
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
Company
Deal Size ($M)
Series/Stage
Date
HQ
State
Industry
Faraday Future
 2,000.0
Corporate
4/20/2018
Los Angeles
CA
Transportation
Lyft
 600.0
Series I
6/27/2018
San Francisco
CA
Software
Allogene Therapeutics
 411.8
Series A
4/19/2018
South San 
Francisco
CA
Pharma & biotech
Robinhood
 362.9
Series D
5/10/2018
Palo Alto
CA
Software
Instacart
 350.0
Series E
4/5/2018
San Francisco
CA
Software
Opendoor
 325.0
Series E
6/13/2018
San Francisco
CA
Software
Grail (Biotechnology)
 300.0
Series C
5/21/2018
Menlo Park
CA
Pharma & biotech
Tradeshift
 250.0
Series E
5/30/2018
San Francisco
CA
Software
Cohesity
 250.0
Series D
6/11/2018
San Jose
CA
Other
Dataminr
$221.1
Series E
6/4/2018
New York
NY
Software
Fund Name
Investor
Fund Size ($M) Date
HQ
State
Foresite Capital Fund IV
Foresite Capital Management
 668.0
5/3/2018
San Francisco
CA
8VC Fund II
8VC
 640.0
4/24/2018
San Francisco
CA
Meritech Capital Partners VI
Meritech Capital Partners
 630.0
6/1/2018
Palo Alto
CA
Charles River Partnership XVII
Charles River Ventures
 600.0
5/11/2018
Cambridge
MA
WiL Fund II
WiL (World Innovation Lab)
 521.0
6/20/2018
Palo Alto
CA
Matrix Partners XI
Matrix Partners
 450.0
6/20/2018
San Francisco
CA
Emergence Capital Partners V
Emergence Capital Partners
 435.0
5/21/2018
San Mateo
CA
Redpoint Ventures VII
Redpoint Ventures
 400.0
6/19/2018
Menlo Park
CA
Venrock Healthcare Capital Partners III
Venrock
 400.0
4/20/2018
New York
NY
Sprout Endurance Partners
SVB Capital
 392.0
5/18/2018
Santa Clara
CA
Company
Exit Size ($M)
Exit Post-val ($M) Date
HQ
State
Industry
DocuSign
 465.7
 4,411.2
4/27/2018
San Francisco
CA
Software
Mercari
 496.6
 3,701.0
6/19/2018
San Francisco
CA
Software
Pluralsight
 310.5
 1,979.6
5/17/2018
Farmington
UT
Software
Avalara
 180.0
 1,559.6
6/15/2018
Seattle
WA
Software
Smartsheet
 174.0
 1,483.4
4/27/2018
Bellevue
WA
Software
Company
Exit Size ($M)
Acquirer(s)
Date
HQ
State
Industry
Flatiron
 1,900.0
Roche (SWX: ROG):
4/6/2018
New York
NY
Healthcare technology 
systems
Ring
 1,200.0
Amazon (NASDAQ: AMZN)
4/12/2018
Santa Monica
CA
Consumer Products
Glassdoor
 1,200.0
Recruit Holdings (TKS: 6098) 
6/21/2018
Mill Valley
CA
Media
Kensho
 550.0
S&P Global (NYSE: SPGI)
4/9/2018
Cambridge
MA
Software
NxThera
 406.0
Boston Scientific (NYSE: BSX)
4/27/2018
Maple Grove
MN
Healthcare devices & 
supplies
34 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
2Q US VC activity by state & 
territory
2Q US VC activity by top 
metropolitan statistical areas
State
District
Deal Count
California
12
217
New York
12
102
California
18
83
New York
10
83
Massachusetts
7
75
California
17
48
California
14
43
Washington
7
41
California
33
31
California
13
30
California
52
26
Massachusetts
5
25
Illinois
7
22
Massachusetts
8
22
California
49
20
Colorado
1
20
California
45
18
Texas
21
18
Colorado
2
16
District of 
Columbia
15
Washington
9
15
California
19
14
Massachusetts
4
14
Georgia
5
13
North Carolina
1
13
Pennsylvania
14
13
California
15
12
New York
7
12
Texas
10
12
California
37
11
Oregon
3
11
Wisconsin
2
11
2Q US VC activity by top 
congressional districts
State
Deal 
Count
Deal Value 
($M)
California
648
15,604.5
New York
232
2,881.3
Massachusetts
160
3,270.1
Texas
95
617.0
Washington
78
914.5
Colorado
57
466.6
Pennsylvania
53
242.3
Florida
45
108.3
Illinois
38
253.4
North Carolina
38
411.3
Virginia
29
90.9
Georgia
27
339.8
Michigan
27
129.3
Minnesota
27
131.4
Maryland
26
241.1
Oregon
23
392.9
Utah
23
185.6
Wisconsin
22
101.8
Ohio
21
274.2
Tennessee
19
66.9
New Jersey
18
81.1
District of Columbia
15
75.4
Arizona
13
82.2
Indiana
11
28.1
Missouri
11
21.6
Connecticut
10
57.1
Delaware
10
5.4
Nevada
10
40.3
Arkansas
7
3.9
South Carolina
7
13.0
Idaho
6
6.7
Kentucky
6
6.3
New Hampshire
6
20.5
MSA
Deal Count
San Francisco-Oakland- 
Fremont, CA
348
New York-Northern New Jersey-
Long Island, NY-NJ-PA
238
Boston-Cambridge-Quincy, 
MA-NH 
155
San Jose-Sunnyvale- 
Santa Clara, CA
123
Los Angeles-Long Beach- 
Santa Ana, CA 
111
Seattle-Tacoma-Bellevue, WA
72
Washington-Arlington-
Alexandria, DC-VA-MD-WV
50
Austin-Round Rock, TX
48
San Diego-Carlsbad- 
San Marcos, CA
48
Chicago-Naperville- 
Joliet, IL-IN-WI
36
Denver-Aurora, CO
36
Philadelphia-Camden-
Wilmington, PA-NJ-DE-MD
34
State
Deal 
Count
Deal Value 
($M)
New Mexico
6
25.2
North Dakota
6
21.0
Alabama
4
14.2
Iowa
4
8.7
Kansas
3
11.3
Rhode Island
3
11.1
Hawaii
2
0.9
Oklahoma
2
0.3
Puerto Rico
2
1.8
Vermont
2
2.2
Louisiana
1
—
Maine
1
0.3
Nebraska
1
9.0
South Dakota
1
1.2
Wyoming
1
1.1
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
PitchBook-NVCA Venture Monitor 
Methodology
Fundraising 
We define VC funds as pools of capital raised for the purpose of investing in the equity of startup companies. In addition to funds raised 
by traditional VC firms, PitchBook also includes funds raised by any institution with the primary intent stated above. Funds identifying as 
growth-stage vehicles are classified as PE funds and are not included in this report. A fund’s location is determined by the country in which 
the fund is domiciled; if that information is not explicitly known, the HQ country of the fund’s general partner is used. Only funds based 
in the United States that have held their final close are included in the fundraising numbers. The entirety of a fund’s committed capital is 
attributed to the year of the final close of the fund. Interim close amounts are not recorded in the year of the interim close. 
Deals 
We include equity investments into startup companies from an outside source. Investment does not necessarily have to be taken from an 
institutional investor. This can include investment from individual angel investors, angel groups, seed funds, VC firms, corporate venture 
firms, and corporate investors. Investments received as part of an accelerator program are not included, however, if the accelerator 
continues to invest in follow-on rounds, those further financings are included. All financings are of companies headquartered in the US. 
Angel & seed: We define financings as angel rounds if there are no PE or VC firms involved in the company to date and we cannot determine 
if any PE or VC firms are participating. In addition, if there is a press release that states the round is an angel round, it is classified as such. 
Finally, if a news story or press release only mentions individuals making investments in a financing, it is also classified as angel. As for 
seed, when the investors and/or press release state that a round is a seed financing, or it is for less than $500,000 and is the first round as 
reported by a government filing, it is classified as such. If angels are the only investors, then a round is only marked as seed if it is explicitly 
stated. 
Early-stage: Rounds are generally classified as Series A or B (which we typically aggregate together as early stage) either by the series of 
stock issued in the financing or, if that information is unavailable, by a series of factors including: the age of the company, prior financing 
history, company status, participating investors, and more. 
Late-stage: Rounds are generally classified as Series C or D or later (which we typically aggregate together as late stage) either by the series 
of stock issued in the financing or, if that information is unavailable, by a series of factors including: the age of the company, prior financing 
history, company status, participating investors, and more. 
Growth equity: Rounds must include at least one investor tagged as growth/expansion, while deal size must either be $15 million or more 
(although rounds of undisclosed size that meet all other criteria are included). In addition, the deal must be classified as growth/expansion or 
later-stage VC in the PitchBook Platform. If the financing is tagged as late-stage VC it is included regardless of industry. Also, if a company is 
tagged with any PitchBook vertical, excepting manufacturing and infrastructure, it is kept. Otherwise, the following industries are excluded 
from growth equity financing calculations: buildings and property, thrifts and mortgage finance, real estate investment trusts, and oil & gas 
equipment, utilities, exploration, production and refining. Lastly, the company in question must not have had an M&A event, buyout, or IPO 
completed prior to the round in question. 
Corporate VC: Financings classified as corporate VC include rounds that saw both firms investing via established CVC arms or corporations 
making equity investments off balance sheets or whatever other non-CVC method actually employed. Rounds in VC-backed companies 
previously tagged as just corporate investments have been added into the dataset.  
Capital efficiency score: Our capital efficiency score was calculated using companies that had completed an exit (IPO, M&A or PE Buyout) 
since 2006. The aggregate value of those exits, defined as the pre-money valuation of the exit, was then divided by the aggregate amount 
of VC that was invested into those companies during their time under VC backing to give a Multiple On Invested Capital (MOIC). After the 
average time to exit was calculated for each pool of companies, it was used to divide the MOIC figure and give us a capital efficiency score. 
Exits 
We include the first majority liquidity event for holders of equity securities of venture-backed companies. This includes events where there 
is a public market for the shares (IPO) or the acquisition of majority of the equity by another entity (corporate or financial acquisition). This 
does not include secondary sales, further sales after the initial liquidity event, or bankruptcies. M&A value is based on reported or disclosed 
figures, with no estimation used to assess the value of transactions for which the actual deal size is unknown.
COPYRIGHT © 2018 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means—graphic, electronic, or 
mechanical, including photocopying, recording, taping, and information storage and retrieval systems—without the express written permission of PitchBook Data, Inc. Contents 
are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Nothing herein should be construed as any past, current 
or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does not purport to contain all of the 
information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment.
35 
2Q 2018 PITCHBOOK-NVCA VENTURE MONITOR
Why we teamed up
Meet the PitchBook-NVCA Venture Monitor
NVCA is recognized as the go-to organization for  
venture capital advocacy, and the statistics we 
release are the industry standard. PitchBook is 
the leading data software provider for venture 
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clients across the private market. Our partnership  
with PitchBook empowers us to unlock more 
insights on the venture ecosystem and better 
advocate for an ever-evolving industry.
A brand-new, quarterly report that 
details venture capital activity  
and delivers insights to inform your 
investment strategy. PitchBook’s  
data will also bolster our  
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We will email quarterly surveys to each 
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not only power PitchBook-NVCA reports, 
but also ensure your firm is represented 
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into a company’s round-by-round financing 
history, executive team and market traction. 
Price deals with confidence using pre- and 
post-money valuations, public and private 
comps, cap tables and series terms.
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in on other firms or strategic acquirers 
whose investment preferences match your 
portfolio company.
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