Venture capital investors are becoming more optimistic about the performance of their portfolios, according to a survey by Preqin. The survey found that 38% of Preqin clients anticipate better performance in venture capital portfolios in 2024, up from 12% the previous year. However, the survey also highlighted challenges for fund managers, including the difficulty of raising capital and pricing dislocation. Despite these challenges, the survey suggests that there may be long-term opportunities for investors who are strategically positioned to seize them.
The survey also found that VC fundraising has seen a downturn, with a 53.2% decrease in funds raised in 2023 compared to the previous year. This has been particularly pronounced in expansion/late-stage funds. Deal activity has also been affected, with early-stage deals outperforming late-stage deals in terms of both the number of deals and the deal value.
One sector that has stood out in terms of exits is healthcare, which accounted for almost half of the aggregate exit value. Trade sales were the most common exit strategy, representing 66.1% of exits. The survey also found that 50% of respondents plan to maintain their venture capital allocation unchanged in 2024.
