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Equity

The venture market is overcorrecting

Oct 18, 2023
Gené Teare, a well-known analyst of the global venture capital market, joins the podcast to discuss the Q3 2023 venture capital market as a whole. They also cover stage-level health, venture capital flows around the world, and the decline in unicorn births. They analyze data, highlight struggles faced by investors and startups, and discuss the resilience of the European market.
32:58

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Venture capital funding in Q3 2023 has experienced a downturn, with early stages, particularly seed funding, being the hardest hit, reflecting a cautious climate in the industry.
  • The exit market has seen a decline in performance, but there are signs of potential improvement in the M&A market as companies explore acquisition options due to the challenging exit environment.

Deep dives

Venture capital market trends

Venture capital funding in Q3 2023 has experienced a downturn, with Q3 being the second lowest quarter for venture dollars raised. Early stages, particularly seed funding, have been the hardest hit. This cautiousness in investment reflects a more realistic and cautious climate in the venture industry, characterized by investors holding back and focusing on efficiency. Despite the overall decline, AI remains a significant sector, making up around 14% of all venture funding. While the number of new unicorns has significantly decreased compared to previous years, the current downturn is seen as an overcorrection following the excessive valuations of 2021. Despite the decline, there are still companies that retain market interest due to being strategic or having the potential for outsized returns.

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