Practically 80% of enterprise funds raised in only two states as US LPs retreat to the coasts

Enterprise capital funds in the US raised extra dry powder in the primary three quarters of this yr than they did in all of 2021, nevertheless it’s not equally distributed: The large funds maintain getting larger whereas fundraising has gotten tougher for nearly all of different gamers. And Q3 knowledge exhibits that the place a agency relies seems to be enjoying an growing position.

By means of the third quarter of 2022, U.S. enterprise corporations raised $150.9 billion throughout 593 funds, in response to knowledge compiled by PitchBook. Whereas this represents a lift from the $147.2 billion raised in 2021, it marks a staggering drop from the 1,139 funds closed final yr.

Numerous these {dollars} went into legacy or well-established corporations, which have the clout to lift mega-funds, although some corporations drew in {dollars} by garnering hype. Consequently, LPs are usually not as fascinated with backing corporations exterior of the established enterprise hubs this yr, marking an unlucky reversal to the COVID-induced development of extra enterprise cash making its technique to rising ecosystems.

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