As a fractional CFO specializing in fundraising preparation, I often hear founders ask whether it’s too late to close their funding rounds as the year comes to a close. Many assume that investor activity slows down during the holiday season. Surprisingly, the data tells a different story: December is one of the best months to finalize venture capital deals.
According to Carta’s analysis of over 38,000 venture rounds from 2018 to 2023, December consistently ranks as one of the strongest months for signed VC deals. In fact, December accounted for 11.4% to 13.5% of total annual deals in recent years, making it a critical period for startups and investors alike.
Why Does December Stand Out?
Several factors contribute to December being such a strong month for closing VC deals:
- Momentum from Q4 Negotiations:
Deals typically negotiated in October and November reach final agreements in December. Founders and investors use the last quarter to finalize terms, align legal documents, and close before year-end deadlines. - Year-End Capital Deployment:
Many venture funds operate on an annual deployment schedule, which incentivizes them to invest remaining capital before the calendar year ends. This creates a natural urgency for deal completion in December. - Holiday Motivation:
Both founders and investors aim to tie up loose ends before the holiday season. This shared urgency often accelerates decision-making and negotiations. - A Clear Pipeline for the New Year:
Closing a funding round in December sets startups up for a strong start to the new year, with fresh capital in hand and a clear strategic roadmap for execution.
What the Data Shows
The data from Carta reveals a consistent pattern:
- In 2020, December saw a peak with 13.5% of all annual VC deals closed that month.
- Even in years with market slowdowns, December remains an active month, with 10.7% of deals in 2023 closed during this period.
What This Means for Founders
If you’re currently in the process of fundraising, don’t slow down now! There’s still plenty of time to close a round before the new year. Here are a few tips to make the most of December:
- Stay responsive and organized: Investors appreciate quick turnarounds, especially during this busy period.
- Leverage year-end urgency: Highlight how closing now benefits both sides—whether it’s deploying capital or accelerating growth.
- Finalize your pitch materials: Ensure your investor deck, financial model, and due diligence documents are polished and ready.
Final Thoughts
While January is typically the slowest month for VC deals due to the holiday break, December is the perfect window to finalize negotiations and close your round. Founders who seize this opportunity can enter the new year with momentum, ready to execute their plans.
As a fractional CFO, I’ve supported startups in navigating the ups and downs of fundraising. If you’re looking to close your round or prepare for a future raise, don’t hesitate to reach out. Let’s make this December your most productive month yet!