Nearly 80% of venture funds raised in just two states as US LPs retreat to the coasts

Venture capital funds in the United States raised more dry powder in the first three quarters of this year than they did in all of 2021, but it’s not equally distributed: The big funds keep getting bigger while fundraising has gotten harder for the majority of other players. Data from Q3 shows that the place a firm is located seems to play an increasingly important role.

According to data from PitchBook, the U.S. venture companies raised $150.9 billion in 593 funds during the third quarter 2022. Although this is an increase from the $147.2 million raised in 2021 it still represents a remarkable drop from 1,139 funds that were closed last year.

Many of these funds went to legacy or established firms that have the ability to raise large-scale funds. However, some firms were able to attract attention and draw in money by generating hype. This is a sad reversal of the COVID-induced trend that more venture money was flowing to emerging ecosystems.