Key Takeaways
- • Arkansas companies attracted $197 million in angel, seed and venture capital in 2025, according to the University of Arkansas Arkansas Capital Scan 2025, with venture capital alone falling 33% to $184.3 million, the lowest level in five years.
- • Average venture deal size dropped from $15.2 million in 2024 to $7.1 million in 2025, even as the state recorded 28 venture deals, up 47% from 2024.
- • The five largest deals accounted for 83% of venture dollars, and two very large deals drove 54% of all dollars raised in Central Arkansas.
- • Nondilutive federal research funding to Arkansas companies fell 70% to $5.5 million, with awards down 20% to 12, reflecting nationwide federal grant disruption.
- • Angel and seed deals fell 8.3% to 22 in 2025, underscoring a thin early-stage pipeline, according to University of Arkansas and StartupNWA officials.
Summary
Arkansas companies received $197 million in angel, seed and venture capital investment in 2025, according to the Arkansas Capital Scan 2025, released Tuesday, Oct. 13, by the University of Arkansas. The report, in its sixth year, was commissioned by the Northwest Arkansas Council and developed by the UA's Office of Entrepreneurship and Innovation with financial support from the Walton Family Foundation. It tracks angel and venture investment, crowdfunding and nondilutive federal grants.
Venture capital investment declined 33% to $184.3 million, the lowest amount in five years. The report attributes the decline to a drop in average deal size from $15.2 million in 2024 to $7.1 million in 2025, even though the state logged 28 venture deals, up 47% from the prior year. The five largest deals accounted for 83% of venture dollars. Central Arkansas recorded growth in deals and dollars, with two very large transactions accounting for 54% of all dollars raised in the state. Northwest Arkansas had 54% of all deals but only 34% of capital raised in 2025. Over the past four years, Northwest Arkansas accounted for 73% of all Arkansas deals and dollars raised.
Angel and seed activity contracted in deal count. Such deals fell 8.3% to 22 in 2025, while total dollars raised rose 60% to $12.7 million. That increase was still 51% below 2023 and 63% below 2021, the peak year. The average angel or seed deal was $606,571, with a median of $205,000. Northwest Arkansas companies received 77% of these deals.
Crowdfunding campaigns declined 7.6% in number, and dollars raised fell 24%, driven by fewer debt-based and product-based campaigns. The average product-based raise fell from $43,500 to $21,000. Northwest Arkansas accounted for 51% of campaigns and half of dollars raised.
Nondilutive research funding, largely from the America's Seed Fund program of the U.S. Small Business Administration, fell 70% to $5.5 million, and awards dropped 20% to 12. The report links the national decline to Trump Administration changes affecting federal grant programs, which led many companies not to pursue grants, as well as a government shutdown that disrupted federal programs. Nationally, equity funding fell to $66.1 billion in 2025, the lowest since 2018.
Phil Shellhammer, executive director of the University of Arkansas Office of Entrepreneurship and Innovation, said that while more venture deals are encouraging, the state needs a steady base of young companies ready to raise capital, and that the small number of angel and seed deals should prompt investors to examine what is holding those investments back. Katie Dzugan, senior program officer at VentureWell, said Arkansas is strong at funding founders once they are ready to raise but thin on the early-stage funnel. Serafina Lalany, executive director of StartupNWA at the Northwest Arkansas Council, called for more founder training, experienced advisers and outside investor engagement.
According to the most recent U.S. Census Bureau data, Arkansas had 49,201 employer firms and 245,000 non-employer firms in 2023. Employer firms made up 17% of companies but generated 97% of state revenue.
Venture capital investment declined 33% to $184.3 million, the lowest amount in five years. The report attributes the decline to a drop in average deal size from $15.2 million in 2024 to $7.1 million in 2025, even though the state logged 28 venture deals, up 47% from the prior year. The five largest deals accounted for 83% of venture dollars. Central Arkansas recorded growth in deals and dollars, with two very large transactions accounting for 54% of all dollars raised in the state. Northwest Arkansas had 54% of all deals but only 34% of capital raised in 2025. Over the past four years, Northwest Arkansas accounted for 73% of all Arkansas deals and dollars raised.
Angel and seed activity contracted in deal count. Such deals fell 8.3% to 22 in 2025, while total dollars raised rose 60% to $12.7 million. That increase was still 51% below 2023 and 63% below 2021, the peak year. The average angel or seed deal was $606,571, with a median of $205,000. Northwest Arkansas companies received 77% of these deals.
Crowdfunding campaigns declined 7.6% in number, and dollars raised fell 24%, driven by fewer debt-based and product-based campaigns. The average product-based raise fell from $43,500 to $21,000. Northwest Arkansas accounted for 51% of campaigns and half of dollars raised.
Nondilutive research funding, largely from the America's Seed Fund program of the U.S. Small Business Administration, fell 70% to $5.5 million, and awards dropped 20% to 12. The report links the national decline to Trump Administration changes affecting federal grant programs, which led many companies not to pursue grants, as well as a government shutdown that disrupted federal programs. Nationally, equity funding fell to $66.1 billion in 2025, the lowest since 2018.
Phil Shellhammer, executive director of the University of Arkansas Office of Entrepreneurship and Innovation, said that while more venture deals are encouraging, the state needs a steady base of young companies ready to raise capital, and that the small number of angel and seed deals should prompt investors to examine what is holding those investments back. Katie Dzugan, senior program officer at VentureWell, said Arkansas is strong at funding founders once they are ready to raise but thin on the early-stage funnel. Serafina Lalany, executive director of StartupNWA at the Northwest Arkansas Council, called for more founder training, experienced advisers and outside investor engagement.
According to the most recent U.S. Census Bureau data, Arkansas had 49,201 employer firms and 245,000 non-employer firms in 2023. Employer firms made up 17% of companies but generated 97% of state revenue.
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