The venture capital benchmark report

Top Firms continued to hold the lion’s share of deals in 2024, working on more than twice the number of deals as All Firms throughout the year. However, their deal flow was volatile and significantly lower than in 2023—suggesting Top Firms weren’t immune to tougher dealmaking conditions. 

What’s driving this? Top Firms appear to be more selective—prioritizing stricter diligence and companies with more promising growth potential—but also ready to act when opportunities arise. Many are likely focusing on fewer but larger deals. In 2024, average VC deal size increased across all stages, contributing to a 5% YoY increase in global VC deal value—despite a decline in deal count. 

Meanwhile, All Firms saw a steady decline in deal flow, ending 2024 with 17% fewer deals YoY. All Firms appear to be feeling the heat of competition, which 42% of investors cite as the biggest factor impacting deal flow—leaving many firms unable to secure deals even when activity picks up.

Engagement rose—and was more consistent—in 2024 for All Firms, who sent and received 17% more emails YoY in Q4. After two slow years of dealmaking, All Firms likely ramped up outreach efforts to source new deals, which is the top priority for 50% of investors. 

‍Top Firms also saw increased engagement, though primarily for a different purpose (more on that in chapter 3).

All Firms outpaced Top Firms in network growth in 2024, particularly in Q1 when they added 11% more contacts. Despite slower network growth for the rest of the year, All Firms ended 2024 with a 4% YoY increase in new contacts—suggesting they ramped up outreach at the start of the year before shifting to a more targeted approach.

As competition intensifies, more firms are moving from inbound deal sourcing to outbound strategies powered by data-driven insights and technology.

Looking more closely at the median number of contacts added per user, Top Firms saw two consecutive quarters of network growth in 2024, but ended the year with 4% fewer new contacts YoY. This indicates that they shifted toward prioritizing existing relationships for deal sourcing and portfolio support, since engagement increased while network growth fell.

Top Firms consistently made more introductions than All Firms throughout 2024, ending the year with a 16% YoY increase. As deal flow slowed in Q2 2024, Top Firms likely shifted to supporting their portfolio companies midyear—connecting them to talent or potential customers—since introductions rose while network growth declined.

While liquidity remains challenged, the pressure is on to deliver returns and reinforce LP confidence—especially for firms planning to fundraise in the near future. In response, Top Firms are hyperfocused on maximizing portfolio growth to demonstrate the ongoing value of their funds and ensure each company achieves a positive exit, whenever that may be. 

On the whole, 2024 was a year marked by intense concentration and large events propping up an otherwise sluggish venture market. Just 20 VCs captured 60% of the total capital raised, making it increasingly difficult for smaller, less established firms to get in on deals before their competition. 

Despite these challenges, many investors remain optimistic about 2025; more than 70% of dealmakers expect to close more deals compared to last year. 

For firms to succeed in this competitive environment, it will be crucial to balance a strategic, data-driven approach to deal sourcing with the fundamentals of venture capital: relationship building. Success hinges on strengthening existing relationships through consistent communication across the entire VC ecosystem, engaging with founders, LPs, co-investors, and strategic advisors to stay agile and capitalize on opportunities as they arise.