Podcast: Fewer Venture Capital Investments are Creating a Slowdown in the Market

The Alternative Edge

In a new episode of The Alternative Edge, a Weaver Beyond the Numbers podcast, host Brandon Cooperman, partner and New York investment funds leader at Weaver, talked to Vincent Harrison, venture capital analyst at PitchBook. The two had an insightful discussion to understand the current trends and future outlook in the venture capital market.

Key Points:

• Slow-down in deal activity and capital deployment is likely to continue through the end of 2023 as investors remain on the sidelines and take a ‘wait and see’ approach.
• Exit environment is at a standstill and likely to last through the end of the year. Companies currently looking to go public need to show a path to profitability and demonstrate strong financial metrics as opposed to ‘growth-at-all-cost.’
• Investor-friendly market environment should create attractive opportunities for investors with regard to valuations and when negotiating deal terms.

What are the major causes behind the current slowdown in the venture capital industry, and what can be anticipated as the market continues to evolve? How does this data-driven analysis guide stakeholders in their decisions?

With fundraising turning sluggish and an observable slowdown in exit strategies, Harrison shares his perspective through a stark but candid assessment of what he describes as perhaps the most challenging environment for venture capitalists in over a decade. 

“I think we’re definitely in this slowdown period, especially relevant to 2021 and the first half of 2022…there are a lot of investors who are slowing down capital deployment, particularly a lot of non-traditional investors, a lot of crossover investors,” said Harrison.

The conversation also focused on the following:

• Analysis of the current funding environment and trends based on market data
• The sluggishness in fundraising and IPO market, leading to decreased deal activity
• Predictions for the second half of 2023 and the potential rise in alternative financing methods

Subscribe and listen to future episodes of Weaver: Beyond the Numbers on Apple Podcasts or Spotify.

©2023

Vincent Harrison is a New York City-based Venture Capital Analyst at PitchBook. Specializing in data research and analysis on private and public companies, Harrison provides insights into the venture capital industry and is known for his research on global M&A, private equity, and venture capital investments.