Unleashing Massive Tech Investment Reserves: $311B Dry Powder Accumulated

A new report from Pitchbook reveals that venture capitalists (VCs) in the U.S. have a record $311 billion in unspent cash as tech funding cools down. VC groups raised $435 billion between 2020 and 2022, but have only deployed half of that amount. This means that there is a significant amount of accumulated “dry powder” as VC firms grow more cautious about investing as startup valuations fall. Instead, these firms are focusing on more established companies or strengthening their existing portfolios. Last year, there was a doubling in startup collapses, with companies like Hopin and Convoy going under. VC fundraising reached its lowest total since 2017, but analysts predict it could increase this year although it is unlikely to reach the highs seen during the pandemic. The profile of founders has also changed, with more experienced executives now running startups compared to the pandemic era, where companies could raise large sums of money without a solid business model or product.