Fundraising in 2025? The 5 Key VC Market Trends You Need to Know

If you’re a growing company, you know how all-consuming fundraising can be—particularly in today’s market. 

As fractional CFOs, we help clients from pre-seed to Series B+/M&A navigate an incredibly challenging fundraising landscape. From when to fundraise, how much to fundraise, and the decision whether to raise equity or debt, we use data to help guide our clients to the best decisions for their business. Today, we’re sharing some of our key insights—including proprietary analysis you can’t get anywhere else. 

Below, we share our top 5 trends from our latest Quarterly VC Market Insights Report including analysis of VC activity and industry trends. Read the full report here from Pilot’s CFO Services Team.

The Key Trends of Q4 2024: Summary

1. The percentage of tech companies with less than 12 months of runway decreased 5% QoQ, which we view as a positive lagging indicator for the health of the funding environment. Based on proprietary & macro- economic data, we expect this trend to continue.
2. VC deal value is up ~30% YoY, driven primarily by later stage AI companies. This increased investment provides a favorable backdrop as we head into 2025. However, the time between rounds for all series hit decade highs and continues to increase due to lack of late stage company exits.
3. While deal value has increased significantly, deal count growth remained more muted with 14% YoY growth (12% QoQ growth). This is primarily driven by a concentration of larger deals into fewer startups.
4. Technology companies continue to dominate deal activity. Tech accounts for 50% of all deals in Q4 2024, fueled (once again) by AI investment. Notable deals from Q4 include a $10B Series J & several >$4B raises, whereas the largest deal in Q3 was a $1.5B Series F.
5. Supply of VC capital remained limited in 2024, driven by a backlog of startups seeking funding after extended gaps between rounds. Worth noting that there is a healthier balance for early-stage companies (Pre-Seed/Seed/Series A

1. Pilot Proprietary Data Trend: Cash Runway is Improving

According to Pilot proprietary data, fewer companies have <12 months of runway than Q3 2024.

Pilot proprietary data indicates green shoots of a recovery in the venture ecosystem, as 40% of tech companies have less than 12 months of runway vs. 45% 6 months ago.

We attribute this to the dynamics in the latter part of 2024, which saw an increase in deal count, median valuations, and deal sizes, driven by notable growth in AI, SaaS, and certain healthcare startups. This positive trend is expected to carry into 2025 as improving macroeconomic conditions and gradually rising investor confidence support continued momentum. 

We anticipate that we may see further improvement in the implied runway for companies over the next quarter within our proprietary data set—which we view as a lagging indicator for the health of the funding environment.

2. VC Market Trend: Deal Value and Investment is Up

2024 saw more investment than 2023 and deal value is up ~30% YoY, which provides a favorable backdrop as we head into 2025.

Keep in mind that in 2021 we experienced an unprecedented year of high valuations and overfunded companies. We like to think of 2021 as an “outlier” year rather than a strict comparison point.

From Q3 to Q4 2024, deal value increased by 70%.

The year ended strong with ~$75Bn of deals in Q4 2024 driven primarily by late-stage companies coming to market.  

The time between rounds for all series hit decade highs and continues to increase. It’s been over two years since the last investment for most Series C+ and Venture Growth companies.

We anticipate two major tailwinds heading into 2025:

• More rate cuts: A more favorable macroeconomic environment is likely to free up capital.

• Changing political landscape: The administration’s focus on reducing regulation (especially for AI) and spearheading more business-friendly tax reforms may help, though incremental tariffs are a potential headwind.

3. VC Market Trend: Deal Count Increased Only Slightly

Deal count increased 12% quarter-over-quarter and 14% year-over-year.

While deal value grew tremendously, deal count growth remained more muted. Though more capital is being invested overall, these investments are being concentrated into a smaller number of startups. 

The average deal size across all funding stages has continued to grow compared to pre-pandemic levels in 2019, with early-stage deals now 2x larger and later-stage deals nearly 3x larger.

It is worth noting that the effect of further concentration into fewer startups is expected to continue in 2025.

4. VC Market Trend: The Tech Industry Still Dominates

The Technology industry continues to dominate VC deal share with 50% of overall deal value.

The trend of outsized AI investments continued in Q4.

Notable deals from last quarter included a $1.5B Series F, whereas this quarter we saw a $10B Series J round (Databricks) and several >$4B raises.

As a percentage of total deals, the following shows a breakdown of VC deals by industry in Q4 vs Q3 2024:

• Technology = 50% (+10% QoQ)
• Healthcare = 15% (-15% QoQ)
• B2B/B2C = 20% (flat QoQ)
• Other = 15% (+5% QoQ)

5. VC Market Trend: Deal Supply Remained Limited

Deal supply remained limited in 2024.

This trend continues to be driven by a backlog of startups seeking funding after extended gaps between rounds. 

While there was a healthier balance at the early-stage funding stages, late-stage and venture-growth funding continued to face acute shortages as a few high-profile deals (AI & SaaS) continued to capture a disproportionate share of available capital.

‍_‍Want help with your next fundraise?

While today’s fundraising landscape poses unique challenges, our team of experienced fractional CFOs and strategic advisors are here to help. We can help you fundraise from pre-Seed to Series C/M&A. To discuss your specific situation, book time here.