The Most Important Metric for Venture Markets
Use this to predict the future
Okay, maybe a mild overpromise in the subheader there…
Anyway!
There’s one metric I watch to predict what will happen in venture markets.
It’s not dollars deployed.
It’s not average valuation.
It’s the NUMBER and YoY GROWTH RATE of startups funded in a given year.
Case in point…from ‘95-‘99, number of startups funded nearly 3x’d.
We know how that ended…
Why is this so highly predictive? Because a greater absolute numbers of startups creates an unsustainable dispersion of talent and growth capital that bottlenecks companies getting to large outcomes.
So where are we today? Round count is actually DOWN from ‘24-25. Below even 2019 levels.
Makes you think…🤔