Key takeaways:

  • Exit activity saw a major uptick nationally, recording the second highest exit values on record in Q3.
  • Local exit flow was the second lowest going back to 2014, but experts say there's little reason for concern
  • L.A. saw fewer deals in Q3 than anytime since 2016, but also the highest amount of capital invested since that year, showing a preference for quality over quantity
  • 2020 is on pace to establish a record high for total capital raised for VC funds, but big funds are having most of the success while smaller funds are struggling

Despite predictions of a black swan event amid the worst pandemic in a century that shows little sign of improving soon, venture capital exit activity saw a major uptick in the third quarter, according to the PitchBook-National Venture Capital Association (NVCA) Venture Monitor released Tuesday. Dealmaking and fundraising were both also robust in Los Angeles and beyond.

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Just 140 startup deals were completed in the second quarter of 2020 in greater Los Angeles, according to the latest PitchBook-NVCA Venture Monitor released Tuesday. That is the fewest since Pitchbook and the National Venture Capital Association began tracking the data in 2014.

By comparison, there were 216 deals in the first quarter of 2020 and 210 during the second quarter of 2019. Total capital invested in the last quarter was cut in half from the frenzied first quarter of 2020, though investment was slightly ahead of the last quarter of 2019.

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Editor's note: This is the third in our series examining diversity in venture capital. Read the first story here, our second one here and sign up for our newsletter to get the latest updates.

For all the well-intentioned talk on social media and beyond about the need for diversity and inclusion after the killing of George Floyd, there is one thing that speaks louder than anything else in venture capital: Money.

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