How unicorns helped venture capital get later, and bigger

The venture capital industry’s comeback from fear in Q1 and parts of Q2 to Q3 greed is worth understanding. To get our hands around what happened to private capital in 2020, we’ve taken looks into both the United States’ VC scene and the global picture this week.

Catching you up, there was lots of private money available for startups in the third quarter, with the money tilting toward later-stage rounds.

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Late-stage rounds are bigger than early-stage rounds, so they take up more dollars individually. But Q3 2020 was a standout period for how high late-stage money stacked up compared to cash available to younger startups.

For example, according to CB Insights data, 54% of all venture capital money invested in the United States in the third quarter was part of rounds that were $100 million or more. That worked out to 88 rounds — a historical record — worth $19.8 billion.

The other 1,373 venture capital deals in the United States during Q3 had to split the remaining 46% of the money.

While the broader domestic and global venture capital scenes showed signs of life — dollars invested in Europe and Asia rose, American seed deal volume perked back up, that sort of thing — it’s the late-stage data that I can’t shake.

To my non-American friends, the data we have available is focused on the United States, so we’ll have to examine the late-stage dollar boom through a domestic lens. The general points should apply broadly, and we’ll always do our best to keep our perspective broad.

A late-stage takeover