> The transformation of the venture capital industry over the past year has been stark. Total venture capital raised by startups plunged 80% from Q1 2022 to Q1 2023. Venture deal count fell 45% over the same span. Overall, Q1 was the slowest quarter for both capital raised and deal count since 2017.
Does this come to a shock to anybody given the sequence of events:
1. Pandemic economic relief to offset otherwise lost wages due to restrictions is roughly equivalent to "injected money/liquidity from the sky"
2. Subsequent inflation
3. Subsequent federal reserve monetary policy in response said inflation in an attempt to stop it from spiraling
How is venture capital expected to perform well in these conditions? Is the point of this article "venture capital was expected to do worse off given the change in underlying economic conditions, but not this drastically of a difference"?
Federal Funds Rate is about to be 5.25%
30 year fixed mortgages are ~7%
Financing a new car for 60 months is 7%
I'm less interested in "how bad is the state of venture capitalism" right now and more interested in "when is it roughly expected to get better/be less bad again"?
Does this come to a shock to anybody given the sequence of events:
1. Pandemic economic relief to offset otherwise lost wages due to restrictions is roughly equivalent to "injected money/liquidity from the sky"
2. Subsequent inflation
3. Subsequent federal reserve monetary policy in response said inflation in an attempt to stop it from spiraling
How is venture capital expected to perform well in these conditions? Is the point of this article "venture capital was expected to do worse off given the change in underlying economic conditions, but not this drastically of a difference"?
Federal Funds Rate is about to be 5.25%
30 year fixed mortgages are ~7%
Financing a new car for 60 months is 7%
I'm less interested in "how bad is the state of venture capitalism" right now and more interested in "when is it roughly expected to get better/be less bad again"?