Our recently released 2025 US Investment Outcomes Monitor reveals a cautiously optimistic market marked by stabilizing valuations, selective venture outcomes, and mounting pressures in private equity (PE) exits.

For investors and stakeholders, this report underscores a bifurcated investment environment where concentrated bets on frontier technologies fuel momentum, while traditional sectors like life sciences face cyclical headwinds. Investors and managers must navigate these dynamics with disciplined valuation approaches, strategic portfolio management, and an eye toward evolving market conditions.

To explore detailed data and forward-looking analysis, download the full 2025 report.

Key Trends

Valuation Stabilization

Down rounds in venture capital (VC) deals have declined sharply from 15.3% in 2024 to 6.4% year-to-date (YTD), with over 90% of new financings achieving higher valuations than prior rounds. This trend signals growing pricing discipline and investor confidence, though many weaker firms remain unaccounted for.

Late-Stage Pressure and Insider Participation

Most down rounds (76%) occur in late-stage or venture-growth companies, highlighting uneven recovery favoring early-stage investments. Insider-led VC deals have increased to 9.1% of rounds YTD, reflecting reliance on existing investors amid constrained external fundraising.

Selective Venture Outcomes

Of companies raising their first VC round since 2015, fewer than 8,000 reached a fourth round, and only 5% exited after their first round. Survivors at later stages dominate exit value creation, underscoring the importance of identifying high-potential firms.

Private Equity Exit Congestion

PE firms hold a record 12,552 companies, many aged four to nine years, indicating slowed exit cycles. This extended holding period risks compressing returns and delaying distributions to limited partners, though recent rate cuts may ease financing costs.

Uneven Sector Recovery

Technology sectors, particularly software as a service (SaaS) and artificial intelligence/machine learning (AI & ML), drive nearly half of 2025 exit value. AI & ML is the sole vertical surpassing last year’s exit count, masking weaker performance in other areas. Life sciences, while still contributing significant exit value ($19.1 billion YTD), have seen their share of U.S. exit value drop from 20.3% in 2024 to 10.5%, reflecting shifting investor focus.

Market Outlook

The venture market shows early signs of recovery, but exit prospects remain uneven. Continued pricing discipline and improved IPO activity could support healthier exits in 2026 and beyond. However, PE exit bottlenecks and sector-specific disparities highlight ongoing challenges.

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Additional Resources

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