Latest news with #NationalVentureCapitalAssociation
Technical.ly
4 days ago
- Business
- Technical.ly
Baltimore startups see funding slow as AI dominates VC interest
Venture capital dropped again in Baltimore last quarter, as investors pulled back amid a broader dip that mirrors national market trends. Companies secured $70.8 million across 15 deals in the Baltimore region in Q2 2025, according to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association. That represents a 46% drop compared to the first quarter of the year, which brought in $132 million across 21 deals. Q1 had already marked a slowdown from the last quarter of 2024, when investment jumped to close out the year. The continuous downturn in the Baltimore region isn't surprising to McKeever 'Mac' Conwell, founder of local firm RareBreed Ventures, who said the VC industry is still undergoing a 'reset' after the boom in 2021. 'It's a lot of macro trends that we're seeing in the data, but playing out here locally,' Conwell said. 'Generally speaking, the funding market has been really, really tough the last three years.' UpSurge Baltimore, which also tracks local venture capital activity, reported a different figure for Q2 total investment: $93 million. According to UpSurge data analytics manager Chris Bunner, it's a good reflection of Baltimore's core funding base, which he pegs at $90–$100 million per quarter. In past years, quarterly totals were often inflated by one or two mega deals, he said, so current figures appear lower by comparison. Over the past decade, local VC funding has gone on a volatile ride. Activity ramped up in 2018, with funds deploying capital faster than ever, according to RareBreed's Conwell. After a brief pause at the start of the pandemic, capital flooded in — fueled in part by the crypto boom, he said — which created massive liquidity and drove up startup valuations. Many venture firms were investing their funds in just 1 to 2 years instead of the usual 3 to 5, pushing limited partners to keep up with the faster pace. When public markets dipped in 2021 and 2022, it put a damper on investor enthusiasm, Conwell said. That made their venture allocations look disproportionately large, causing many to pause or reduce their commitments to VC funds. With less capital flowing into firms and many early-stage investments made at inflated valuations, the industry was forced to slow down. 'Everybody's like, 'Oh, we've overspent and spent way too much money, way too fast. Now let's take a step back,'' Conwell said. AI is investor catnip, but the local pipeline remains strong While overall funding remains tight, certain sectors are emerging as clear priorities for investors, shaped in part by shifting federal policy and economic focus under the Trump administration, according to the NVCA Q2 report. 'Companies operating in AI, national security, defense tech, fintech, and crypto — sectors aligned with the administration's priorities — are attracting disproportionately more investor interest, and this trend will likely continue throughout President Donald Trump's term,' the report read. Conwell also noted the heavy investment concentration in AI companies. Even startups that aren't AI native, he said, are often fitting it into their strategies to remain competitive in the funding landscape. This focus is reflected in Baltimore's two biggest deals of the quarter: Pixee, an AI-powered cybersecurity platform, and Impact Analytics, which applies AI to data analytics. Each secured $15 million. It's likely that biotech, one of Baltimore's largest sectors, will see a decrease in funding, per Conwell, since it relies heavily on federal grants cut by the Trump administration. Bunner, of UpSurge, emphasized that deal type and stage also matter when analyzing the state of the local startup ecosystem. He pointed to several recent Series A deals as signs the region still has a strong early-stage base. That's important for long-term growth, he said, because each Series A sets up the possibility for future later series rounds. 'In a smaller market like Baltimore, it's important to ask not just how much is being invested, but where those deals are happening,' Bunner said. 'Are companies getting funded at every stage? That's what shows whether the pipeline is healthy.' Maria Eberhart is a 2025-2026 corps member for Report for America, an initiative of The Groundtruth Project that pairs emerging journalists with local newsrooms. This position is supported in part by the Robert W. Deutsch Foundation and the Abell Foundation. Learn more about supporting our free and independent journalism.
Technical.ly
18-07-2025
- Business
- Technical.ly
VC slowdown continues as Philly startup funding hits a five-year low
Venture capital went down in Philly again last quarter, falling to its lowest levels since 2020. Companies in the Philadelphia region raised $394.4 million across 83 deals in Q2 2025, according to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association (NVCA). That's down again from last quarter, when startups in the region raised $750 million across 114 deals. The Q1 results had already disappointed investors who were optimistic heading into 2025. This is the lowest quarter for VC activity since Q1 2020, when the region raised $333 million over 100 deals. These numbers aren't surprising given the economic and policy uncertainty this year, especially in Q2, Dean Miller, president and CEO of the Philadelphia Alliance for Capital and Technologies, told 'Investors are very gun-shy to invest in companies that have any kind of exposure to the risks,' he said. Plus, companies are waiting to see whether they'll be impacted by potential policy changes like tariffs. Usually, Q2 is a 'catch-up quarter' from Q1, according to Howard Lubert, regional president of Keiretsu Forum Mid-Atlantic. The April to June period tends to be stronger because delayed deals at the end of the previous year finally close, making the Q2 2025 numbers seem especially low. This year's deal count shows that new deals aren't making it through due diligence and existing deals are falling through, he said. 'It's a sign that investor hesitancy isn't letting up,' Lubert said. 'Founders are facing a capital environment that remains unforgiving.' How the 'Big Beautiful Bill' shaped the market Policy changes are also influencing the investment climate. The only sectors seeing big gains are those prioritized by the Trump administration, like defensetech and artificial intelligence, according to the report. Even then, most of that money went to a handful of companies, none of them in Philly. 'This all underscores the importance of forward-looking public policy,' said Bobby Franklin, president and CEO at NVCA. 'The recently enacted One Big Beautiful Bill Act delivers significant wins for founders and investors … However, the bill also introduces new complexities.' An expansion on Qualified Small Business Stock (QSBS) rules, a tax benefit for shareholders of qualified small businesses, could lead to more restructured deals aiming to support firms' existing portfolio companies, according to Lubert. But lean companies with short return-on-investment timelines will still take priority, he added. The new legislation also ensures permanent research and development expensing. Companies can deduct the costs of domestic research and development from taxable income in the year those costs are incurred, which will hopefully increase cash flow for companies, Miller said. There are new challenges, too. Changes to university endowment taxes mean the institutions with large endowments will face higher tax rates on their investments. The act also outlines plans to decrease investment in clean energy and transportation innovations. ' The Big Bill offers long-term benefits,' Lubert said. 'But those advantages only matter if strong companies are emerging and exits are possible.' There's still hope for a rebound Despite these low numbers, Philly's challenges are not unique and its diverse economy positions it for recovery, according to Miller. Philadelphia is home to a variety of strong industries, meaning it won't rely on just one sector to recover from these challenges, he said. Plus, Philadelphia is a top ecosystem for early-stage companies, which don't rely on venture capital to grow, and challenging times often lead to more new startups, according to Miller. For later-stage founders, hope is not lost, though. Generally, the region is still raising more than it was ten years ago. The best founders are still working towards raising money and the best companies with the best teams will succeed, he said. For example, Sojo Industries raised $40 million and Fore Biotherapeutics raised $38 million last quarter, both of which were among the region's top 5 deals. 'I'm a big believer in 'raising customers,'' Miller said. 'So focusing on your business, your product, your go-to-market, and most importantly, your attraction of customers, is mission critical in these types of environments.'
Business Insider
11-07-2025
- Business
- Business Insider
New York tech leaders are trying to unseat San Francisco for the future of the industry
If Silicon Valley is where tech companies are born, New York is where they go to mature, says a growing ecosystem of NY tech founders and venture capitalists. This community says the Big Apple can unseat the Bay Area in tech dominance. New York, a bona fide destination for tech companies, is further catching up to San Francisco as a tech hub as the importance of having an East Coast presence grows. The city benefits from a diverse culture, has multiple developed industries, and is seen as a gateway to international markets. The state isn't just counting on this happening; it's actively funding the effort. New York Gov. Kathy Hochul has spearheaded a $40 million Empire AI program to supercharge artificial intelligence research in the state. California still beats NY for funding. In the first quarter of 2025, the Bay Area boasted 658 VC deals totaling $58.7 billion, compared with 441 deals totaling $7.1 billion in New York City, according to a report by PitchBook and the National Venture Capital Association. Still, as investment volume picks up, a steady stream of VC firms has set up shop in New York. In recent years, Lightspeed Venture Partners joined a list of firms, including Index Ventures, Thrive Capital, and Andreessen Horowitz, by opening or expanding offices in New York. "We were really fortunate to have some New York-based investors, but fundraising as an exercise was always one that felt we had to do mostly on the West Coast," Mike Mignano, partner at Lightspeed, told Business Insider. "When you're trying to build a team in New York, those trips can be super distracting, time-consuming, and exhausting. I know firsthand that founders relate to this experience," he added. "We feel like having a firm in New York City gives us the ability to meet founders where they are and hopefully make the fundraising process a lot easier." Just don't call it 'Silicon Alley' Tech:NYC, an organization that aims to foster a stronger tech industry in the city, recently secured $350,000 of Empire AI funding. "If you want to go live in a group house and go build an app from the second you wake up to the second you go to sleep and not really see anyone except for your cofounders, then New York is probably not the place for you. And that's OK," Julie Samuels, founder and CEO of Tech:NYC, told BI. Samuels said New York matters most once companies begin to address questions of scale and late-stage considerations. The city has several developed industries, such as finance, professional services, and the arts. It also has a diverse populace, which Samuels says creates a network effect where founders can more easily access customers and clients in one market. She said that New York's tech scene, classically called "Silicon Alley," is not a diminutive of Silicon Valley, but very much its own thing. "Once you build that technology and you're ready to figure out who you're going to sell it to, who's going to pay you for it and use it in practice, and how someone who might not be deeply technical will interact with it, what some of the regulatory concerns are — I feel all of those questions will be answered here in New York," Samuels said. In particular, consumer tech companies like Partiful and Kalshi have found a foothold in New York, which boasts a colorful petri dish of consumer segments. Teddy Solomon, the 23-year-old cofounder and CEO of social media company Fizz, relocated his entire 25-plus-person company to New York from Palo Alto earlier this year. He says NY has a "really tight-knit community" of growth-stage and public company tech founders and executives. "People in New York care more about their companies than themselves, and I love that," Solomon told BI. "In the Bay Area, there are a lot of founders who care more about themselves than their companies." What about the Midwest? As well-trodden as the East Coast versus West Coast arguments have become, a VC who focuses on neither coastal market and is based in Ohio takes a different view. "It's not about New England or the West Coast or whatever. I think this is a more exciting time from an American innovation standpoint than we've ever seen before," Chris Olsen, Drive Capital cofounder and partner, told BI. The firm, which says it makes investments from "east of the Rockies and west of the Hudson River," takes an America-first view on the competition for venture dollars and technological dominance. In the future, Olsen doesn't see a win-or-lose scenario between New York and San Francisco tech companies. "We've got this new thing called artificial intelligence that's shaking up the snowglobe, and this time, when all the snow settles, where is it going to land?" Olsen said. "I'm betting there's more that's going to settle in America as a whole. I don't think it will be nearly as much in California as was concentrated in the past."
Yahoo
05-06-2025
- Business
- Yahoo
NVCA Appoints Vineeta Agarwala as New Board Chair
WASHINGTON, June 5, 2025 /PRNewswire/ -- Today, the National Venture Capital Association (NVCA) announced that Vineeta Agarwala, MD, PhD, General Partner at Andreessen Horowitz, will serve as the Chair of the NVCA Board of Directors for the 2025-2026 term. "Vineeta brings a powerful perspective as both a venture investor and physician — someone who understands firsthand how innovation plays out in the real world, and how policy can accelerate or obstruct it," said NVCA President and CEO Bobby Franklin. "Her experience at the forefront of tech and investing gives her a lens on how smart policy and long-term capital can enable American startups. At a time when policy and innovation are deeply intertwined, she'll help NVCA champion a policy environment where innovation can continue to flourish." "As AI and technology reshape every sector — from healthcare and energy, to education and infrastructure — the role of venture capital has never been more critical," said Vineeta Agarwala. "As NVCA Board Chair, I'm honored to help bridge innovation and impact by working with investors, startup founders, and policymakers to ensure that the U.S. remains the best and most competitive environment to build the future." Agarwala succeeds Byron Deeter, Partner at Bessemer Venture Partners. "What set him apart was his deep interest in how policy shapes venture capital—and his determination to ensure our industry is fully engaged and impactful. Under his leadership, the board traveled to D.C. more in pursuit of building strong relationships with policymakers and reinforcing the critical connection between entrepreneurship and national competitiveness," said Franklin. NVCA also announced the appointment of eight new directors to its Board of Directors, each of whom will serve a four-year term from 2025-2029: Adam D'Augelli, True Ventures Alex Doll, Ten Eleven Ventures Alyssa Jaffee, 7wire Ventures Andrew Adams, Oak HC/FT Amy Wu Martin, Menlo Ventures Graham Brooks, .406 Ventures Navid Farzad, Frist Cressey Ventures Sandy Grippo, Bessemer Venture Partners The National Venture Capital Association (NVCA) empowers the next generation of American companies that will fuel the economy of tomorrow. As the voice of the U.S. venture capital and startup community, NVCA advocates for public policy that supports the American entrepreneurial ecosystem. Serving the venture community as the preeminent trade association, NVCA arms the venture community for success, serving as the leading resource for venture capital data, practical education, peer-led initiatives, and networking. For more information about NVCA, please visit View original content to download multimedia: SOURCE National Venture Capital Association
Technical.ly
30-04-2025
- Business
- Technical.ly
Baltimore hits $90.9M in VC activity to start 2025
The Baltimore region began this year with a slow trickle of venture capital activity, in stark contrast to its spike at the end of last year. This year's first quarter saw $90.9 million invested across 19 deals throughout the Baltimore metropolitan statistical area, according to PitchBook and the National Venture Capital Association's latest quarterly Venture Monitor report. That's about 50% lower than the last quarter, which saw $179.2 million across 15 deals — meaning check sizes are typically lower across more deals. HarborLink, a late-stage telecommunications infrastructure company, nabbed approximately half of the total money in the region this quarter. These statistics are not surprising to Jeff Cherry, the founder of the Baltimore-based accelerator Conscious Venture Lab. In addition to leading the program's parent organization, the Novella Center for Entrepreneurship, Cherry also serves as the CEO and managing general partner of the early-stage investment firm Conscious Venture Partners, which has funded several alums of the accelerator. There's too much money 'on the sidelines,' he explained — in other words, there is wealth to be invested in companies, but limited partners aren't writing many checks to put money in funds. Investing in venture capital is risky, Cherry acknowledged. Liquidity has been lacking over the last decade, with few exits or IPOs. But more deals need to get done, and those funds should also be from the Baltimore region. 'There's not enough money, local money, coming into venture as there should be,' Cherry told 'in order to continue to catalyze the great things that are happening here.' He's about to start raising money for Conscious Venture Partners' third fund, and is bracing for difficulty. 'We know it's going to be a challenge,' Cherry said. 'It's going to be an uphill battle.' Baltimore's VC flow was also slow at the beginning of 2024. In that year's first quarter, the region's companies accrued $89.8 million across 20 deals — nearly identical figures to Q1 2025. 2023 and 2022 started with $78.3 million and $77.7 million, respectively. This isn't unique to Baltimore, though: Cherry noted that deal flow is down in other parts of the Mid-Atlantic. Philadelphia saw a dip in activity, and DC's numbers were lower this quarter compared to the end of last year. Contrarily, Pittsburgh saw historical numbers, though 90% of the total funds went to two companies. AI strength amid anti-DEI attacks David Asbery, founder of the direct-to-consumer platform independent musician platform Pedestal, has been going after capital for about two years. This year, he received $25,000 from Maryland's venture arm TEDCO. TEDCO initially rejected his funding appeal, but encouraged him to do a program through the organization to polish his pitch. He got to pitch for 10 minutes and got 10 minutes of feedback as well as connections to investors. 'Anytime I get rejected, and there's some type of, 'Hey, we didn't pick you for this, but click here and do this,'' Asbery told 'I always click here and do whatever they say … because I look at it as following the stream.' Now he's in talks with additional venture capitalists in Baltimore, but he's found that investors want to participate with fellow funders in a $1 million round — not necessarily write the checks for hundreds of thousands that he's seeking out. The process of finding additional investors is also time-consuming. Asbery is not looking for a round of that caliber at the moment, but found these investor conversations helpful for making the connections he can leverage when he reaches that point. That said, he's seen a stark difference in raising money for Pedestal versus Rush Roto, the AI photo editing platform developer he cofounded. 'Depending on the industry that your startup belongs to, that also is a big determining factor in the type of funding and attention you're going to get,' Asbery said. Rush Roto has collected $500,000, including some funds from an initiative for Black founders backed by Amazon Web Services. He predicts that accelerators and programs for underrepresented founders will continue to dwindle under the Trump administration due to attacks on diversity, equity and inclusion programming. He speculated these attacks may explain why venture capital funding dropped this quarter. 'Now we're in a new environment where it's frowned upon,' he said. Founders: It's time to be capital efficient Cherry from Conscious Venture Partners believes it'll continue being difficult for startups to raise. He encourages founders to focus on profitability and becoming capital efficient. Those that follow this will grow slowly, but it'll work out in the long run, he said. Pedestal's founder Asbery is following that rule: He still has money in the bank from the TEDCO investment. Given the economic turmoil, startups will likely have to raise at lower valuations because of risk in the market, Cherry said. Tariffs will also negatively affect founders — some startups relying on products from abroad may fail, he said. Despite these difficulties, Cherry wants venture capitalists to write checks. Investors need to double down on investing in innovation and early-stage businesses, because that's where the returns exist. This quarter marks a downturn for Baltimore, but compared to when Cherry moved to the region in 2013, the ecosystem has grown exponentially. 'I think that we are getting much better as an ecosystem of being connected, but we're still not perfect,' Cherry said, adding: 'I still think that there's work to do in terms of turning this collection of assets we have into a stronger ecosystem. It is light years ahead of where it was.'
