Despite the challenges faced by venture firms in 2022, emerging managers in the United States have proven to be resilient in their fundraising efforts. While initial concerns suggested that these managers, who lack the established networks and track records of their more experienced counterparts, would struggle disproportionately, the reality has been quite different. Data from PitchBook reveals that U.S. emerging managers have raised an impressive $11 billion across 170 funds in the first three quarters of 2023.
Key Takeaway
In 2023, U.S. emerging managers have demonstrated their ability to navigate a difficult fundraising environment. Although their fundraising figures may not match those of the previous year, emerging managers have maintained a consistent percentage of the overall capital raised, indicating their enduring value to LPs.
This year’s fundraising figures indicate a positive rebound for emerging managers, even though they are not likely to reach the $41 billion they raised in 2022, which itself marked a 31% decrease from the previous year. However, when compared to established managers, the performance of emerging managers becomes more impressive.
PitchBook reports that established venture capitalists have raised $31 billion across 174 funds in 2023. This means that established managers have only surpassed emerging managers by four funds this year. Moreover, despite the overall decline in fundraising activity, emerging managers have accounted for 26% of the total capital raised, up from 23% in 2022. This indicates that emerging managers are progressively raising a larger share of the total capital, while established managers are raising less.
Vincent Harrison, a VC analyst at PitchBook, highlights that historically emerging managers have consistently raised a similar percentage of the overall capital each year. While their numbers may appear lower in 2023, this is due to the general market conditions and the overall depressed fundraising landscape. Harrison emphasizes that even in a challenging fundraising climate, emerging managers continue to offer limited partners (LPs) access to the asset class and specialized focus areas within the venture capital landscape, ultimately contributing to their ongoing success.
