May 25, 2022

First quarter how 2022 was a great year for venture capital raising startups at any time other than The frenzied private capital cycle of 2021. Even though there was still a lot of capital in the market at the start of this year and deal closes looked strong, we are seeing cracks in the tensions in the startup sector.

What did you give?

It appears that many startups have raised funds in excess of the protective reward limit in the last year, leaving them in a zero-margin situation. Any startup making double or triple digit returns in 2021 is now facing declining value for tech companies and well-known groups of investors pulling back deals. This can lead to a decrease (or worse).

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What makes the situation ironic is that we are starting to see startup layoffs, transplants and valuation discounts as venture capital freezes. New data from Pitchbook reviewed by The Exchange this morning paints a picture of a still hot US venture capital market. And yesterday, when we surveyed the global enterprise market with data from Crunchbase News, we saw a similar pattern. (More information will be available tomorrow, so stay tuned for regional and regional details throughout the week.)

just chatting not so bad In the startup market, at least in terms of the amount of investment that we calculated in the first quarter. And yet, you can’t launch Twitter without plunging into the doom and gloom of startups over the past few weeks. So what’s going on?

unicorn vulnerability

initial pitchbook show data There will likely be 4,822 venture capital rounds in the US in the first quarter. According to the company, the value of these transactions amounted to $70.7 billion. If the pace of the first quarter is maintained until the end of the calendar year, Which corresponds to 19,288 transactions and $282.8 billion.

Compared to the 2021 total from the same source, U.S. venture capital activity in 2022 should surpass last year’s deal volume (17,105) but lag behind dollar volume ($342.2 billion). To be honest, this is hardly a recession, although all startups want to pay out more capital every year than they did last year.

The irony of the current situation is that if 2021 had been a less epic year, fewer startups would have faced valuation and a financial crisis this year.

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