Mapping Recent VC Investment Trends in Boston, New York & Silicon Valley
Startups must understand VC investment trends in their and other regions, as the landscapes in Boston, New York, and Silicon Valley have changed significantly over the past five years.
Boston’s VC Investment Activity Landscape
Recent data on VC-backed startup funding rounds by stage during the 2020–2024 period reveals the distribution of venture funding rounds in Boston, highlighting a strong emphasis on early-stage investments while showing significantly reduced activity in mid- and late-stage funding.
This trend underscores VCs in Boston prioritizing and fostering new and emerging ventures over scaling or supporting more mature companies.
· Early-stage investments consistently dominate Boston's VC landscape, representing the majority of investments throughout the 2020–2024 period. Their share steadily increased from 56% in 2020 to a peak of 60% in 2023 before stabilizing slightly at 58% in 2024. This sustained focus on early-stage investments reflects Boston's commitment to nurturing startups and fostering innovation at the foundational stages of development.
· Mid-stage investments remain relatively stable over the years, consistently accounting for 15–21% of Boston's venture investments. In contrast, late-stage investments experience a gradual decline, dropping from 10% in 2020 to just 8% by 2024. This shift highlights a steady focus on supporting ventures in their growth phase, while investments in mature, late-stage companies appear to be deprioritized over time.
· Less conventional VC deal types showed steady growth over the years, increasing from 15% in 2020 to 17% in 2024. This gradual rise suggests a growing interest in alternative investment opportunities outside traditional funding stages, reflecting the evolving preferences and strategies of investors in Boston's venture capital ecosystem.
A 5-Year Trend for a Broader Contraction in Boston’s VC Activity
Over the 2020-25 period, Boston's VC activity shows significant fluctuations in both deal volume and total funding. Funding peaked at $11.5 billion with 267 investments in Q4 2021 but declined steadily to $3.4 billion and 160 investments by Q4 2024. This downward trend signals a broader contraction in venture activity, potentially driven by market corrections, increased investor caution, or evolving investment priorities.
NY’s VC Investment Activity Landscape
New York's VC landscape from 2020 to 2024 reveals a consistent dominance of early-stage investments, which peaked at 73% in 2023 before stabilizing at 66% in 2024. In contrast, mid-stage and late-stage rounds remained relatively low, accounting for just 12% and 7%, respectively. Quarterly data shows that funding reached a high of $18 billion in Q4 2021, with 714 rounds, but declined steadily to $4.9 billion and 318 rounds by Q4 2024. This trend underscores a sustained focus on early-stage investments, coupled with a broader decline in total deal volume and funding, reflecting a shift toward prioritizing emerging ventures while scaling back on later-stage investments.
Silicon Valley's VC Investment Activity Landscape
Silicon Valley's VC activity from 2020 to 2024 demonstrates a consistent dominance of early-stage rounds, which peaked at 76% in 2023 before slightly declining to 70% in 2024. Mid-stage and late-stage rounds remained steady at 15% and 6%, respectively. Funding experienced significant fluctuations, reaching a high of $30.6 billion in Q4 2021, declining to $11.8 billion in Q4 2024, but briefly spiking to $36.6 billion in the same period. This data underscores Silicon Valley's sustained focus on early-stage investments while highlighting the volatility in funding and a shift toward more concentrated, selective investment strategies, reflecting a dynamic venture capital environment.
Source Data: CB Insights
Conclusion
The data from Boston, New York, and Silicon Valley highlights a consistent focus on early-stage investments from 2020 to 2024, with each region showing distinct dynamics. Boston emphasizes nurturing startups, with declining mid- and late-stage activity. New York maintains its focus on early-stage investments but experiences a broader contraction in funding and deal volume. Silicon Valley pairs its early-stage dominance with significant funding volatility, reflecting a more selective investment approach. Overall, the venture capital landscape shows a shift toward early-stage opportunities, increased selectivity, and evolving priorities since the 2021 funding peak.
Two Notes to Readers:
“Lessons” generally avoids regional comparisons due to the numerous nuances and subtleties that distinguish one region from another. Additionally, regions like the Northwest, Southwest, and Southeast are not covered in this blog post. This is primarily due to time and space constraints, as well as the geographical distribution of “Lessons” readers and the concentration of VC activities in the three regions discussed.
I prefer to avoid using the term "deals" and instead opt for terms like investments, rounds, or funding. This is because no founder, startup CEO, or executive leadership team wants their hard work, sacrifices, and ingenuity to be diminished by being labeled simply as a "deal."