In the first half of 2016, there were 155 total M&A deals, with disclosed value of $14.1 billion and 18 initial public offerings raising $1.5 billion, again according to Thomson Reuters and the NVCA. This means a total of 173 liquidity events. However, there were 1,061 deals in the first quarter of 2016 according to PricewaterhouseCoopers LLP and the NVCA, suggesting around 2,000 deals in the first half of 2016. Now the number of deals is different than the number of companies, but one gets a sense of the number of companies that have received venture capital funding is very large compared to the number of liquidity events. If companies don't or aren't able to achieve a liquidity event, the rates of return for venture capital will ultimately suffer.
Venture capital is a cyclical industry, and the amount of dry powder may be cause for concern.