AngelList 2024 Market Report

Last week, AngelList released The State of U.S. Early-Stage Venture & Startups 2024. So, I put together a short list of the most important insights. Here’s a preview of what they had to say:

⛰ The Market Held Its Ground

After a tough 2023, the good news is that the market did not seem to get worse in 2024. While optimism remains measured, the stability in 2024 offers hope for a return to healthier dynamics. It seems that stabilization and rightsizing of valuations over the past year will pave the way for a limited, but undeniable, venture market recovery over the next year.

🔥 Seed Valuations Stay Thriving

Early-stage funding remains highly competitive, with seed valuations continuing to defy broader market trends. Seed round valuations have been a surprising counterpoint to the general venture market weakness over the past two years. Valuations of Series A and later rounds all fell about 40%, from peak-to-trough. However, seed rounds valuations had only fallen about 10%.

🤖 AI Market Dominates Across New Startups

The surge in AI-driven startups shows no signs of slowing. Nearly a third of seed deals on the AngelList platform involve startups primarily identifying as AI companies. This surge reflects both genuine innovation and opportunistic branding, as founders chase funding along a shrinking set of paths that can support stubbornly high seed valuations.

🌊 Liquidity Timelines Are Longer

The median time from Seed to exit has stretched to 7.5 years. With the IPO window still tight, 80-85% of early-stage exits in 2024 were private acquisitions. But, big buyouts have become increasingly rare. The majority of these acquisitions were priced under $100M.

Overall, the AngelList report points to a few key conclusions:

1. There is a general flight to quality. Investors are spending more time vetting performance proof points, and milestones during the due diligence process.

2. Angel investors are leading the way with first checks in most pre-seed deals. The larger VCs moving down-market often wait to see further market validation before participating.

3. Uncertainty in the broader macro environment has prompted founders to raise more money in fewer rounds to guarantee 18-24 months of runway.

What do you think? What’s your impression of the current state of angel investing and venture capital?

Check out the report at the link below!

https://www.angellist.com/data-center/the-state-of-venture-2024