On January 4th, 2023 Term Sheet, a well-known financial newsletter by Fortune (typically regarding PE/VC) posted a series of predictions regarding the calendar year 2023.
One of these predictions was the following:
“We expect a slow H1 2023 as investors continue to shy away from overvalued late-stage companies” —Gené Teare, senior data editor, Crunchbase News
I will not attempt to initially define all resolution criteria in this market and will instead attempt to handle any nuances/complications/data feasibility as it arises. If by end of 2023 I think it is not possible to confidently resolve this market in the spirit in which it was intended, I reserve the right to resolve as "n/a".
Any clarifications to the resolution criteria will be listed below, along with the applicable date:
[TBU]
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Sorry for the delay here - ended up reviewing this resolution in tandem with others in the Term Sheet series.
Given both my personal experience as a banker, Robert's links below, and reporting from Crunchbase itself, this can safely resolve YES.
H1 2023 definitely appears to have been a slow time for PE/VC investment.
From SP: Global private equity and venture capital deal counts declined for the 6th consecutive quarter as high interest rates, economic uncertainty, and geopolitical tensions continue to slow down dealmaking activity. Overall, the number of deals dropped 39% year-over-year to 8,759 entries from 14,418 deals in the same period last year. Aggregate deal value in the first half of 2023 amounted to $244 billion, down 51% from $501 billion in H1 2022
From SVB: The innovation economy has slowed down. Investment has fallen from recent highs, valuations are rebasing and exit markets remain mostly closed. Companies have reacted to these changes by reducing net burn. However, historical data shows that the number of unicorns founded during and after recessions increases.
From Beacon: The global recession was triggered by slowdowns in large economies, increased geo-political risks, staggering inflation, and shrinking consumer spending, which has resulted in sluggish performance from startups. The overall market has witnessed a decline in startup valuations, driven by a rise in downrounds and flat rounds (by up to 18% and 9%, respectively, in recent fundraising). Conversely, the proportion of startups raising at increased valuations relative to their past rounds decreased to 71% in Q1 20231. Notably, late-stage startups have significantly contributed to this decline. Investors and analysts alike have noted that the high valuations that the market experienced in Y2021 are unlikely to be seen again soon.