Extension Rounds and Down Rounds
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Looking at the newly released Venture Beacon Report, we see the decrease in down rounds for early-stage companies in the first half of 2024 reversed in the second half of the year, increasing to 20.3% of all early-stage deals. Flat rounds declined to 7.6% from 10.9% in the first half of 2024.
Meanwhile, down rounds meaningfully declined for late-stage companies in the second half of 2024, decreasing to 27.6% from 34.4% in the first half of the year.
The decline in down rounds for late-stage companies coincides with the overall reduction in extension rounds occurring in the market in the latter half of 2024. Extension rounds appear to have peaked in the first quarter of 2023, at 30% of all transactions, and have since declined to 22% in Q4 2024. Extension rounds in 2024 returned to the levels previously seen in 2019 and 2020.
The decrease in the prevalence of down rounds at later-stages and the general decrease in extension rounds speak to the relative improvement in the overall health of the venture capital market in 2024.
Read the full 2H 2024 Venture Beacon Report.
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