AI Investments Are Booming, but Venture-Firm Profits Are at a Historic Low

(WSJ) Silicon Valley’s venture-capital firms are having an easy time finding promising startups to back. The hard part is cashing out.

Last year, U.S. venture firms returned $26 billion worth of shares back to their investors, the lowest amount since 2011, according to the data provider PitchBook. Startup investors say 2024 has continued the trend, with high levels of investment and few acquisition deals or initial public offerings.

“We’ve raised a lot of money, and we’ve given very little back,” Thomas Laffont, co-founder of investment firm Coatue Management, said at a recent conference. “We are bleeding cash as an industry.”