I often remind investors and entrepreneurs that this current down period is only two minutes in a two-hour movie. Investors are now more willing to focus on Clean Tech 2.0 as companies address climate change and develop differentiated energy sources. We are also seeing tremendous interest in climate-related technology, such as electronic vehicle charging and other green energy products. We expect to see companies that offer real utility gain the most interest from investors, particularly those that develop products and services for necessities, such as energy, health care and information technology. We still predict full-year VC activity to finish above $200 billion for 2022. Slow activity over the summer will likely result in a softer start to the quarter because it takes time for new deals to get into the pipeline. October will offer a good proxy for what the new normal looks like. While some investors and entrepreneurs have experienced downturns in the past, many new entrants have yet to build up scar tissue, which will prove challenging. Make sure you have a proper support network in place to address the challenges and questions you will face in your professional life as well as your personal life.Can you get more from your customers today based on what you invested in your roadmap? Critically challenge your product roadmap as it relates to timing and monetization.When delivering a product with high utility, negotiate up-front payments, if possible, with customers to fund additional investments or resources. Given that it is less expensive to keep a customer than acquire a new one, reduce churn and focus on those who are more profitable. In the current environment, it is critical to demonstrate near-term results with existing resources. Fundraising favors entrepreneurs who are executing, investing in customer growth and retention while demonstrating a path to profitability.Įntrepreneurs need to focus on execution, customers and demonstrating a path to profitability. With the fear of missing out that drove so much activity over the past year and a half gone, investors are now taking their time to deploy capital. Year to date, VC fundraising reached $151 billion, marking the fifth consecutive record year of fundraising. Entrepreneurs capable of putting together compelling business models will continue to raise money. On the positive side, plenty of capital remains available on the sidelines. At the same time, it’s important to remember that we’ve been through downturns like this before. Market volatility continues to persist due to inflationary pressures, rising interest rates and recessionary fears. Companies are now adopting a more defensive posture as entrepreneurs and investors are learning how to navigate through a vastly different landscape than what came before. The narrative for the industry continues to change dramatically. In addition, we expect total investment to hit the $200 billion mark for the second year in a row and the fifth successive year of more than $100 billion in VC funding. Even with this significant drop-off, 2022 is already the second-highest investment year on record. Venture capital (VC) investment continued to weaken from the record-setting levels of 2021, declining by 37% in Q3 2022, from $60 billion in Q2 to $37 billion invested.
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