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August 08, 2023 | Tom Ballard

Hutchison PLLC issues Q2 analysis of venture capital in the Southeast

The law firm writes that the themes across the Southeast appear to be "survive and advance" and "back to basics" as overall deal volume, value, and valuations decline considerably.

Hutchison PLLC, which describes itself as a boutique venture law firm ranked by PitchBook among the top in the Southeast based on deal flow, has just issued “State of the Venture Capital Market in the Southeast: Q2 2023.” The report comes on the heels of Launch Tennessee’s report for the same period.

“Based on deals we’ve closed, and others into which we have visibility through Pitchbook and other resources, the themes for Q2 2023 in the Southeast appear to be ‘survive and advance’ and ‘back to basics,'” the authors write. “It continues to be a challenging fundraising market in both the life sciences and technology sectors, generally across all stages of financing, though seed and Series A stage financings show greater relative strength than later stage deals. Companies are focused on cash management, runway extension, and revenue growth, and investors are shoring up their highest potential portfolio companies, stepping up diligence on new deals, and moving away from mega funds. The deal trends we see in the Southeast are consistent with the broader ongoing downturn in the U.S. and global venture and exit markets.”

Among the data highlights are these:

  • Overall deal volume was down around 25 percent from Q1 2023 and down 35 percent year-over-year (YoY) from Q2 2022.
  • Total deal value was down approximately 45 percent versus Q1 2023 and down nearly 70 percent YoY from Q2 2022.
  • Pre-money valuations also continued to decline, dropping off 13 percent from Q1 2023 and roughly 45 percent YoY from Q2 2021’s median of $35 million. Companies headquartered in Florida, Georgia, North Carolina, and Tennessee raised around $1.5 billion across 265 deals for the quarter, with companies in North Carolina and Florida accounting for about half of that deal count and deal value.

The full analysis can be found here.

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