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Signs of An Investor’s Market

  • Published December 14, 2022 6:22AM UTC
  • Publisher Osama Hassan
  • Categories Capital Raising Tips

We are now in an Investor’s Market. 

This is what has changed since last year: 

1) There’s been a massive correction in the public markets which is now filtering to private markets

Cases in point: Netflix lost $54B in market cap, an investor slashed the value of their shares in Canva by 33%, tech giants in the US have lost more than $1 trillion in value since the Fed raised interest rates by half a percentage point

2) There is a potential recession looming and it seems unlikely that central banks will intervene in the short term

3) There are a number of other issues like inflation and the current geo-political situation that are impacting investor confidence 

Despite there being an incredible amount of venture capital and private equity over the last few years, we’re now facing a difficult environment for raising money: 

– The previously popular method of creating private valuations based on comparable public companies is quite unpopular right now 

– Confidence of investors has shifted 

– Some investors are pulling term sheets and not following through on funding commitments 

As a founder, if you’re looking to establish what you should focus on in current market conditions, be sure to check out (links to these articles are in the comments section): 

Adapting to endure – Sequoia Capital

A Framework for Navigating Down Markets – Andreessen Horowitz

YC advises founders to plan for the worst – Y Combinator

The upside of a downturn – Lightspeed Venture Partners

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Click here to view the original Linkedin post.

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