Key Takeaways
- • Arkansas companies raised $197 million in angel, seed and venture capital in 2025, according to a University of Arkansas report, with venture capital down 33% to $184.3 million, the lowest level in five years.
- • Average venture deal size fell from $15.2 million in 2024 to $7.1 million in 2025, while the number of venture deals rose 47% to 28; the five largest deals accounted for 83% of venture dollars.
- • Angel and seed deals fell 8.3% to 22 in 2025, and nondilutive federal research funding dropped 70% to $5.5 million, with awards down 20% to 12.
- • Northwest Arkansas led deal count with 54% of venture deals and 77% of angel and seed deals, but Central Arkansas captured a larger share of dollars due to two very large deals.
- • Officials cited a thin early-stage pipeline as the key constraint, with the report framing the findings as a call for more founder support and investor engagement.
Summary
Arkansas companies received $197 million in angel, seed and venture capital investment in 2025, according to the University of Arkansas Capital Scan 2025, released on October 13, 2026. Venture capital investment declined 33% to $184.3 million, the lowest annual level in the past five years. The report is in its sixth year, was commissioned by the Northwest Arkansas Council, was developed by the UA Office of Entrepreneurship and Innovation, and received financial support from the Walton Family Foundation. It tracks angel and venture investment, crowdfunding and nondilutive federal grants.
The venture decline was driven by a drop in average deal size from $15.2 million in 2024 to $7.1 million in 2025, even as deal count rose 47% to 28. The five largest deals accounted for 83% of venture dollars. Central Arkansas saw increases in both deals and dollars, with two very large deals 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, and accounted for 73% of all state deals and dollars over the past four years.
Angel and seed activity was thin. Deals fell 8.3% to 22, while total dollars raised rose 60% to $12.7 million, though that remained 51% below 2023 and 63% below 2021, the peak year. The average angel or seed deal size was $606,571 with a median of $205,000. Northwest Arkansas companies took 77% of these deals. Crowdfunding campaigns fell 7.6% and dollars raised declined 24%, with the average product-based raise falling from $43,500 to $21,000.
Nondilutive research funding from America's Seed Fund, a U.S. Small Business Administration program offering SBIR and STTR awards, fell 70% to $5.5 million, and awards fell 20% to 12. The report attributes the national decline to Trump Administration changes affecting federal grant programs, reduced company applications, and a government shutdown that lapsed federal programs. Nationally, equity funding fell to $66.1 billion, the lowest since 2018.
Phil Shellhammer, executive director of the UA Office of Entrepreneurship and Innovation, said more venture deals were encouraging but that Arkansas needs a steadier base of young companies, adding that the small number of angel and seed deals warrants closer examination. Katie Dzugan, senior program officer at VentureWell, said Arkansas is strong at funding founders once they are ready to raise but thin on early-stage pipeline. Serafina Lalany, executive director of StartupNWA at the Northwest Arkansas Council, called for more founder training, adviser access and outside investor engagement.
The venture decline was driven by a drop in average deal size from $15.2 million in 2024 to $7.1 million in 2025, even as deal count rose 47% to 28. The five largest deals accounted for 83% of venture dollars. Central Arkansas saw increases in both deals and dollars, with two very large deals 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, and accounted for 73% of all state deals and dollars over the past four years.
Angel and seed activity was thin. Deals fell 8.3% to 22, while total dollars raised rose 60% to $12.7 million, though that remained 51% below 2023 and 63% below 2021, the peak year. The average angel or seed deal size was $606,571 with a median of $205,000. Northwest Arkansas companies took 77% of these deals. Crowdfunding campaigns fell 7.6% and dollars raised declined 24%, with the average product-based raise falling from $43,500 to $21,000.
Nondilutive research funding from America's Seed Fund, a U.S. Small Business Administration program offering SBIR and STTR awards, fell 70% to $5.5 million, and awards fell 20% to 12. The report attributes the national decline to Trump Administration changes affecting federal grant programs, reduced company applications, and a government shutdown that lapsed federal programs. Nationally, equity funding fell to $66.1 billion, the lowest since 2018.
Phil Shellhammer, executive director of the UA Office of Entrepreneurship and Innovation, said more venture deals were encouraging but that Arkansas needs a steadier base of young companies, adding that the small number of angel and seed deals warrants closer examination. Katie Dzugan, senior program officer at VentureWell, said Arkansas is strong at funding founders once they are ready to raise but thin on early-stage pipeline. Serafina Lalany, executive director of StartupNWA at the Northwest Arkansas Council, called for more founder training, adviser access and outside investor engagement.
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