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Venture Capital Report | Dow Jones VentureSource’s Q2 2018 Summary

This article discusses the key findings from the Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation, and liquidity. 

Sammy is a co-founder of Blossom Street Ventures. We invest in companies with run rate revenue of $2mm+ and year over year growth of 50%+. We lead or follow in $1mm to $5mm growth rounds and can do inside rounds, secondaries, restructurings and special situations. We’ve made 16 investments all over the US in SaaS, e-commerce, marketplaces, and low-tech. We can commit in 3 weeks and our check is $1mm. Email Sammy directly at sammy@blossomstreetventures.com.


Dow Jones just released their Q2 2018 venture capital funding report showing trends in venture investing. Below are the trends we found most pertinent as well as our commentary.

Venture Capitalists Invested $99 Billion

VCs are investing more than ever. Over the past 12 months through Q2 2018, VCs have invested $99 billion in US startups, which is a 31% increase over the same 12 months ended Q2 2017. The number of deals hasn’t increased nearly as fast though, growing only 3% to 5381.

As such, the average deal size is much larger, averaging $18 million. In our view, the increase in venture investing and larger deal size is not because venture capitalists are seeing more high-quality deals, rather it’s a function of venture capitalists raising record levels of capital in a proliferation of mega funds. These megafunds need to put money out the door so they are, and they’re doing so in larger deals.

Venture Capital Funds Raised LTM

Late Stage Continues to Attract the Most Venture Capital

Later stage rounds (Series C and beyond) attracted 67% of the capital in Q2 whereas Series B and Series A attracted 16% and 15% respectively. That left only 3% for seed stage rounds ($611 million).

There are more megafunds than ever ($1.0 billion or more to deploy), so the weighting towards later rounds and larger will likely continue.

Venture Capital Report Percent of Dollar Allocation in VC Funds

Four Cities Attracted 86% of Investment

San Francisco based companies attracted 41% of venture dollars invested in the US while NYC attracted 18% and Los Angeles attracted 14%. Since we can remember, Boston has always ranked 3rd, but now they’re 4th at 13%. Notably, that means companies outside these metros attracted only 14% of venture dollars combined. The Midwest and Southeast are more overlooked than ever.

Venture Capital Geographic Split