Plunging tech stocks, crypto collapse, capital raising problems for some players
Negative news always overcome positive, but mainly the analysis behind the red-lines headlines.
We see the present market as an opportunity:
- Many start ups still raise cash (especially earlier-stage);
- Many companies have enough cash on BS for one year at least (and some for 4-5 years!);
- Many not so earlier-stage ones cancel their IPO plans (positive! public markets are not for ever-burning cash unprofitable businesses);
- Some expansion plans are on hold (may save investors’ money from unjustified CAC). This point finally has got the attention of the executives.
Its a vital point for many executives now — do their model really allow to make profit in the future? Maybe the answer is not necessarily positive, or companies are not so sure about it.
As a result, we see massive lay offs from all sorts of techs: big like Meta or Amazon, and small and young in many sectors: fintech, e-commerce, entertainment, collaborative tools, foodtech, logistictech, AI, edutech, SaaS (! sector with light-assets and economy of scale), robotics & IoT, etc.
To finalise, VCs now have a record amount of dry powder, approximately $300B, looking to be invested. This dry powder should continue to provide momentum in the VC space, even if there are significant corrections in the market.