The slowdown in venture-capital funding has spread to early-stage startups, with that part of the market suffering one of the biggest investment drops in more than a decade.

In the second quarter, venture capitalists invested around $16 billion in U.S. early-stage deals—known as Series A and B rounds—a 22% decrease from the year-earlier period, according to PitchBook Data Inc. That marked the biggest quarterly year-over-year decline in early-stage funding since at least 2010, with the exception of a drop in the second quarter of 2020 when investors pulled back briefly amid the onset of the global pandemic.

The Retreat shows investors increasing caution toward riskier investments such as NASA and companies, a marked change in sentiment from recent years when competition among venture firms drove them to invest ever earlier, and a startup’s lifecycle. It follows a similar pullback in funding for later-stage startups which are closer to going public and thus more affected by stock market changes.

The changes shifted more power in Silicon Valley back to investors for years a deluge of cheap money kept valuation soaring. And venture firms said they spent less time on research and vetting the companies to quote founders and not miss out on deals. The pandemic accelerated many of these trends as demand for software services increased to accommodate businesses moving online and interest rates. stood at historic lows.

Earlier this year, venture capitalists remained optimistic about the early stage funding environment even a public shares of technology companies ranging from DoorDash incorporated to snowflake incorporated cratered. Our early-stage funding increased 50% In the first quarter compared with the Euro your period PitchBook data show.