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Mar 11, 2025
17 minutes read

Venture Beacon

2024 Report

Executive Summary

  • The second half of 2024 saw improvements in capital raised and pre-money valuations, particularly at the top end of the market, suggesting potential positive momentum into 2025.  
  • Down rounds decreased in prevalence for late-stage companies, and extension rounds returned to levels seen in 2019 and 2020, indicating a relative improvement in market health.  
  • Despite the increase in up rounds and pari passu financings for late-stage companies, there was a notable increase in the prevalence of pay-to-play provisions in Series B and later rounds, continuing an upward trend since 2022, highlighting a strategic shift toward restructuring preference stacks and prompting investors to support later-stage companies in achieving stability and growth.
  • Startup cohorts from 2021 and 2022 were less likely to secure follow-on capital within two years compared to those from 2019 and 2020, highlighting ongoing challenges in deal velocity and graduation rates.  
  • While there are encouraging signs of growth, extended fundraising timelines and lower stage-to-stage graduation rates suggest that stakeholders should remain vigilant to both opportunities and potential challenges in 2025.

Foreword

Since 2002, Fenwick has been producing a quarterly Venture Capital Survey, aiming to provide valuable insights to the global entrepreneurial and venture community on the terms used in venture financings in Silicon Valley. Twenty-three years later, we are thrilled to partner with Aumni on the Venture Beacon report. This report offers a data-driven perspective on the forces shaping venture capital globally today, and provides unique insights on trends that influence term sheet negotiations, financing structures, and long-term strategic planning.  We are also excited to produce future detailed surveys of venture financings using Aumni’s deep data sourced directly from legal documents, with a focus on more in-depth analysis of investor rights and protections, financing terms, and market trends.

This issue highlights forward momentum in the venture capital market since 2023, along with some signs of caution from investors. From the perspective of Fenwick's startup and venture capital lawyers, who collectively represent over 1,500 VC-backed startups, including more than 100 unicorns, the increase in capital raised and pre-money valuations, particularly within the top quartile of the market, signals a robust and fertile environment for later-stage and high-growth companies. However, the data also reveals challenges in the market: fundraising timelines have continued to stretch, and stage-to-stage graduation rates have declined. This suggests that while some sectors are thriving, others are facing headwinds in maintaining growth.

As we move further into 2025, venture capital will likely continue to operate under mixed signals—with pockets of opportunity amid ongoing challenges. The findings in this report underscore the importance of a nuanced and strategic approach to fundraising and deal structuring. Key legal considerations for the year ahead include:

  • Stronger governance terms in financings as investors seek to mitigate risk in an uncertain market;
  • Developments in corporate law, including in the areas of liability, governance structures, state of incorporation, and information rights; and
  • An evolving secondary market, with more investors exploring liquidity options outside traditional exits.

The data suggests that in 2025 we are looking at a nuanced landscape where legal expertise plays a critical role in navigating both opportunities and challenges. Fenwick's startup and venture capital lawyers, with their deep industry knowledge and experience with startups, are committed to providing strategic guidance that aligns with evolving market dynamics. Our goal is to ensure that stakeholders are equipped to make informed decisions in this complex environment, leveraging our insights to navigate the intricacies of the venture capital landscape effectively.

Ian Goldstein Headshot
Ian Goldstein
Partner, and Co-lead of Startups & Venture Capital Practice
Fenwick
Allison Cooper
Partner, Startups and Venture Capital
Fenwick
Cindy Clarfield Hess
Partner, Startup and Venture Capital
Fenwick
Katherine K. Duncan
Partner, Startup and Venture Capital
Fenwick
Mark Leahy
Partner, Startup and Venture Capital
Fenwick
About Fenwick and Its Startup & Venture Capital Practice
Fenwick is a leading law firm for startups and venture-backed companies, providing comprehensive legal counsel at every stage of growth—from formation and initial funding to IPOs and mergers. Purpose-built for technology and life sciences, we partner with some of the most innovative companies, offering strategic guidance on licensing, IP protection, executive compensation, M&A, and corporate governance. The firm is widely recognized for its industry-shaping work, consistently ranked as a top law firm for venture capital and emerging companies by PitchBook, Chambers, and U.S. News & World Report. Fenwick serves as trusted counsel to over 100 unicorns and over half of the U.S. tech companies valued above $15 billion, helping clients navigate fundraising, board governance, and exit strategies.
In addition to its market-leading Startup & Venture Capital practice, Fenwick provides sophisticated regulatory, litigation, and intellectual property counsel, supporting companies at every stage of growth as they scale, innovate, and address complex legal challenges.
For more information, visit Fenwick’s website.
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