Arkansas Capital Scan Shows Venture Deal Growth, Challenges for Early-Stage Funding

Arkansas recorded more venture capital deals in 2025, but total venture investment declined, and a handful of deals accounted for most of the dollars, according to the latest Arkansas Capital Scan.

The report tracked $197 million in angel, seed and venture capital investment across the state. Arkansas recorded 28 venture deals, up 47% from 2024, while venture investment declined 33% to $184.3 million. The five largest deals received 83% of venture dollars.

Angel and seed funding rose 60% to $12.7 million, while the number of deals fell 8% to 22. Northwest Arkansas accounted for 77% of those deals, its highest share in five years.

The Northwest Arkansas Council commissioned the report, developed by the U of A Office of Entrepreneurship and Innovation with funding from the Walton Family Foundation. Now in its sixth year, Capital Scan tracks startup funding, including angel and venture investment, crowdfunding and nondilutive federal grants. 

The state's results came during a difficult national fundraising environment. U.S. venture capital funds raised $66.1 billion from investors in 2025, their lowest annual fundraising total since 2018.

"More venture deals is encouraging, but Arkansas also needs a steady base of young companies ready to pursue investment," said Phil Shellhammer, executive director of the U of A Office of Entrepreneurship and Innovation. "The small number of angel and seed deals should prompt investors and organizations like ours to look closely at what's holding those investments back and work together to help more founders secure their first round of funding."

Katie Dzugan, senior program officer at VentureWell, said stronger early-stage support can help entrepreneurs turn promising ideas into viable businesses and prepare for investment. VentureWell provides training and mentoring to entrepreneurs in Northwest Arkansas through its FLIPspace program.

"Arkansas is strong at funding founders once they're ready to raise but thin on the funnel that feeds that stage," Dzugan said.

Expanding access to capital and helping founders prepare for investment are central to the Northwest Arkansas Council's work through StartupNWA. By providing founder training and resources and bringing startups and investors to the region, the council is working to make Northwest Arkansas a stronger center for entrepreneurship and investment.

"Arkansas has built companies that changed entire industries. We should be just as ambitious about the next generation," said Serafina Lalany, executive director of StartupNWA at the Northwest Arkansas Council. "Founders need practical training, experienced advisers and resources to develop products, win customers and attract investment. We need to make that support available to more entrepreneurs, encourage more investors within Arkansas to back young companies and bring outside investors here to see what they're building. That's how we help founders build successful companies here, attract more capital to Arkansas and create a more diverse economy with more opportunities for the people who live here."

Capital Scan draws on input from entrepreneurs, investors and other stakeholders across Arkansas. The annual report helps policymakers, investors and organizations supporting entrepreneurs assess funding needs and identify opportunities to support Arkansas businesses. The Office of Entrepreneurship and Innovation is a division of the Sam M. Walton College of Business.

Figures reflect capital tracked by the report and may not capture every investment. Go to the full report. 

About the University of Arkansas: As Arkansas' flagship institution, the U of A provides an internationally competitive education in more than 200 academic programs. Founded in 1871, the U of A contributes more than $3 billion to Arkansas' economy through the teaching of new knowledge and skills, entrepreneurship and job development, discovery through research and creative activity while also providing training for professional disciplines. The Carnegie Foundation classifies the U of A among the few U.S. colleges and universities with the highest level of research activity. U.S. News & World Report ranks the U of A among the top public universities in the nation. See how the U of A works to build a better world at Arkansas Research and Economic Development News.

About the Northwest Arkansas Council: Founded in 1990 by Sam Walton, J.B. Hunt, Don Tyson and several other business leaders, the Northwest Arkansas Council serves as a regional convener for economic and community initiatives. The Council excels at identifying challenges and championing solutions to enhance the prosperity of the Northwest Arkansas region. Key initiatives include work to advance quality of life, attract talent, improve the region's workforce, create job opportunities, upgrade infrastructure and keep up with the region's impressive growth. For more information, visit nwacouncil.org.