TLDR:
- Smaller funds are becoming more common in the venture capital industry, with the average fund size dropping to $115m in Q1 2024, the lowest point in five years.
- New research from Venture Capital Journal highlights this trend of smaller fund sizes.
According to recent research from Venture Capital Journal, smaller funds are becoming the new normal in the venture capital industry. The average fund size dropped to $115 million in the first quarter of 2024, marking the lowest point in about five years.
This trend towards smaller fund sizes could have several implications for the industry, including increased competition for deals as more funds compete for opportunities. Additionally, LPs may need to adjust their investment strategies to navigate the evolving landscape of smaller funds.
Despite the decrease in average fund size, the overall venture capital ecosystem remains active, with new funds continuing to launch and invest in innovative startups. The shift towards smaller funds underscores the importance of adaptability and flexibility in the rapidly changing world of venture capital.
