Title: Investment Cadence in H1 2023: Insights from 15 Investors
As part of an ongoing analysis of venture capital performance in the first half of 2023, TechCrunch+ conducted a survey with 15 investors regarding their investment cadence and plans for the second half of the year.
The survey revealed that while some investors were able to maintain their desired investment pace, others fell slightly short. However, there is a general consensus among investors that a slower investment cadence is becoming the new norm. Rajeev Dham from Sapphire Ventures and Mark Grace from M13 emphasized that the rapid investment rate observed during the pandemic years has come to an end, leading to an adjustment period for many in the industry.
Investors who adopted a slower cadence seem to favor a more cautious approach. Gen Tsuchikawa, CEO of Sony Ventures, stated that they have always been selective in their investments and are currently maintaining a flexible investment cadence.
Dham further advocates for prudence in the coming period and suggests understanding the new operating cadence of businesses to make informed investment decisions. He also predicts a potential retreat from the most active investors in the 2018-2021 period, which could result in reduced capital in the startup ecosystem, subsequently affecting pricing levels.
On the other hand, Mark Grace remains optimistic, predicting the rebound of dealmaking cadence. He believes that maintaining an optimistic outlook is crucial in the industry.
Logan Allin, managing partner and founder of Fin Capital, shared insights into his firm’s confidence, stating that their focus on early-stage startups founded by repeat founders allowed them to be the most active fintech investor globally in Q1.
The article features extensive interviews with investment professionals, including Matt Murphy from Menlo Ventures, Sheila Gulati from Tola Capital, Jason Lemkin from SaaStr, and many others. Each investor shares their experiences and expectations for investment cadence.
Key insights from the interviews indicate that the latter part of 2022 was slow, but investment activities picked up from late February onwards. Q2 saw accelerated investments, particularly in life sciences, digital health, hard tech, and SaaS companies. While some investors experienced busy and active quarters, others focused more on early-stage investments.
Regarding future plans, many investors expect dealmaking activity to remain steady or even accelerate in the back half of 2023. They anticipate an influx of companies that haven’t raised capital in over two years, leading to potential opportunities for investors. However, they also predict a rise in flat and down rounds, but emphasize that valuation should not overshadow building great companies.
Overall, the article discusses the investing climate of the past six months and reveals various strategies and expectations for the coming months.
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