The PitchBook VC Dealmaking Indicator
The PitchBook VC Dealmaking Indicator leverages deal-level data to quantify how startup-friendly, or investor-friendly the capital raising environment is. The Indicator incorporates PitchBook’s deal term, deal attribute, fundraising, and deal flow data to compose an indicator which compares early-stage and late-stage deal dynamics. (For in-depth analysis, click here.)
Higher Indicator values reflect a more investor-friendly dealmaking environment, and lower values a more startup-friendly one. As charted below, since 2010 we see that the scales have tipped decidedly in favor of startups. Though late-stage deals have tended to be more investor friendly, early- and late-stage have both moved sharply toward startup-friendliness with a score close to 20 in Q3 2021.
The chart below shows time-series data for each feature that comprises the overall indicator score, which provides insight into what is driving the model’s output. We see that the movement toward a startup-friendly environment has been driven by a major uptick in valuation step-ups, which reflects increased risk for investors.
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The PitchBook VC Dealmaking Indicator is a proprietary methodology developed by PitchBook for its own sole use, unless permission has been otherwise granted
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