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Four key takeaways from US and UK venture financing during 1H 2023

2023 has been a breathless year for private companies at both early and later growth stages. For many it’s been a year of rebound and recovery following a challenging 2022, which saw a decline in investment and valuations.


So, let’s take a breather and reflect on how this year has gone so far - and what we can expect in the coming months. Wilson Sonsini (a Boardwave Partner) recently issued their latest Entrepreneurs Report, covering all of this and more, compiling data on venture financing transactions during the first half of 2023.


TL;DR? Whether you’re in Series A, B or C, there’s cause for optimism - with some crucial caveats. “Halfway through 2023, the broader U.S. economy seems to be in a better spot than many predicted at the beginning of the year”, says Wilson Sonsini’s Salil Gandhi.


So why the optimism? And what are the caveats? Let’s find out. Without further ado, here are four key takeaways for both pre-seed and post-seed companies from the first half of this financial year.


  1. Later-Stage Valuations Rebound Slightly

Q2 2023 saw median pre-money valuations for Series B, C, and later companies rise marginally over the previous quarter. A return to the peak valuations of 2021-22 remains far off, however, with current valuations for Series C or later companies tracking at just over 50% of all-time highs. This suggests that more mature private companies will continue to struggle to secure high valuations. Improvement is likely only when IPO demand strengthens.


2. Seed and Series A Raise Amounts Return to All-Time Highs


While early-stage valuations declined in Q2 2023, the median amount of cash raised through preferred stock financings in the dataset increased and surpassed the recent highs seen in 2022. A variety of potential factors may be causing this increase, including economic optimism, renewed interest in verticals such as artificial intelligence, and investment by growth funds deploying capital earlier while later-stage activity is low.


3. Up Rounds Make a Comeback


In Q2 2023, after witnessing an increase in down rounds for the previous two quarters, the overall percentage of down rounds in the dataset decreased. However, the current prevalence of down and flat rounds remains above the levels of the past few years, suggesting that some start-ups are having difficulty raising follow-on capital on favorable terms.


4. Convertible Notes Bounce Back


Q2 2023 saw a marked increase in median amounts raised via convertible note financings by both pre-seed and post-seed companies. While the amounts raised per round show some signs of recovery, many note investors are still demanding higher interest rates and shorter maturity periods.

Want the full story? To dive into the details, read the full report from Wilson Sonsini here.




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