In 2022, startup funding fell dramatically—down 67% year over year. Late stage funding took the largest hit (down 67%), but early stage (series A and B) also dropped 59%. Seed stage investments were down 37%.
This could lead to more acquisitions in 2023 as startups run out of funding and don’t want a down round. It could also mean in an increase in ‘structure’ in deals where investors come in at the same valuation but with more favorable terms like multiples on liquidation preference.
See also:
- Running a startup during a recession
- This is either a really good time to start a company or a really bad one
Links to this note
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Probability of a Recession (2023 Q1)
A Wall Street Journal poll of economists found that the probability of a recession in the next 12 months is 61%, down slightly from 63% from October 2022 and significantly higher than the 2022 Q3 roundup.