WJR Business Beat: Q1 Venture Capital Activity Shows Mixed Results (Episode 392)

Good morning, Paul!

Q1 2022 venture capital activity results are now out and here’s what we know. Venture capital remembers the critical source of funding that fuels venture startup and growth and we’re seeing a mixed bag of results in early 2022. Here are the key takeaways.

First, liquidity events. Those are the exit events as they’re known that return funds to these venture capital firms and their investors and those liquidity events are down in Q1 2020. IPOs of VC-backed startups significantly slowed during the first three months with only 28 public listings and Q1 compared to 74 in Q4 2021. Now even so venture capital fundraising activity raised about $75 billion in commitments already in Q1 2022. That amount of funds raised already totals about 60% of all of 2020 ones. Total year record of $132 billion. Investment activity also remained strong in the first quarter with about $71 billion in deal value representing about the fifth highest total in history.

Now Venture Capital Association President and CEO Bobby Franklin said in a statement he made the start of 2022 has shown signs of expected adjustment for the VC industry on the heels of a two-year period where VC-backed startups served as the backbone of the U.S. economy during the global pandemic.

Now many don’t realize it, Paul, but venture capital is critical in so many ways, not only from an economic standpoint, that it creates jobs and fuels these startup companies, which contribute to our economy. But moreover for the average consumer it’s important as well because it’s these startups that fuel innovations that enhance our lifestyles.

I’m Jeff Sloan, founder and CEO of startupnation.com and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.