The Intelligence from The Economist Seed of doubt: venture capital tightens up
Mar 3, 2023
Guy Scriven, U.S. technology correspondent for The Economist, discusses the dramatic shift in venture capital from lavish investments to more strategic, profitable ones amid a tech slump. Ore Ogunbiyi, a British-Nigerian journalist, examines the aftermath of Nigeria's contentious presidential election, revealing deep public distrust fueled by claims of irregularities. Additionally, the surprising rise of chili crisp, a beloved Chinese condiment during the pandemic, highlights how food trends can capture cultural shifts.
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Venture Capital's Impact
- Venture capital has significantly influenced the startup landscape, leading to a focus on growth over early profits.
- Companies like Snap, Uber, and Airbnb, fueled by VC funding, prioritized market share over immediate returns.
Venture Capital Downturn
- The venture capital market is experiencing a downturn, with decreased funding and falling valuations.
- This downturn, while significant, isn't as severe as the dot-com bust, as startups today generally have stronger balance sheets.
Reasons for Downturn
- Soaring inflation and higher interest rates have contributed to the venture capital slowdown.
- Companies promising future profits have become less valuable due to higher discount rates.