Report: VC funding in US startups reached $99.5B in 2018, the highest since 2000, in a total of 5,536 deals, the lowest since 2013
U.S. startups are raising investment dollars at levels unseen since the dot-com era. — Venture capital funding in U.S. companies reached $99.5 billion in 2018 …
Context & Ripple Effects
This closes a three-year arc in GeekWire's annual tally: after the 2016 dip to $69B, 2017's $84B was billed as the most since the dotcom boom — but its deal count of 8,076 was already the fewest since 2012. The warning shot came in November, when the Journal reported first-time financings down 40% from 2015 even as median seed rounds quadrupled.
So the 2018 print — $99.5B, the highest since 2000, on just 5,536 deals — confirms the split: dollars are setting era records while the number of companies receiving them keeps shrinking. The same divergence held afterward, when 2020 hit a record $130B with deal counts falling for a second straight year.
First-order effects
- Late-stage and repeat fundraisers capture nearly all the growth: an ~18% dollar increase over 2017 landed on ~31% fewer deals, meaning average check size swelled sharply while the marginal startup went unfunded.
- Seed-stage founders face a thinner door — initial financings were already down 40% from 2015 mid-year, even as the median seed round reached $2M, roughly four times the 2013 average.
Second-order effects
- LPs chasing the concentrated returns push money into fewer, larger vehicles — following 2014's $29.8B fundraise year, the biggest since 2007 — which arms established firms to write still-bigger checks and squeezes sub-scale funds out of competitive rounds.
- With more capital bidding on fewer companies, late-stage valuations inflate further; the pressure was already visible in 2016's decade-high $84.5M median exit size.
Third-order effects
- The market stratifies into a barbell: a small cohort of heavily capitalized winners absorbing record totals atop a thinning early-stage pipeline — the exact shape that reappeared in 2020's record dollars on falling deal counts, and again in 2021's $643B global total skewed toward late stage.
- A shrunken first-financing cohort today is a reduced exit and follow-on supply years out, entrenching incumbency for whoever holds the largest reserves.
The trend: US venture capital is concentrating into fewer, larger checks per company — a multi-year pattern running from 2016's declining deal counts through 2018's dotcom-era dollar records and into the 2020–2021 funding peaks.