AnD Ventures recap 2022 & forecast for 2023
“The market is constantly changing, and it is evident that it is not the same as it was a year ago, so what does that mean for founders and startups?
Since the end of the pandemic, investments have reached historic highs for five consecutive quarters, with Q1 2022 being the lowest of them all. Despite being higher than in pre-pandemic years, we believe 2023 will be "the onset of an imminent but healthy recalibration period." Investors have become increasingly cautious with global uncertainty due to high inflation, the war in Ukraine, and the fear of recession. As a result, VCs started longer due diligence processes while focusing more on established and proven late-stage companies. These changes have affected early-stage startups looking to raise capital for the first time to help grow and develop.
The following year will see more layoffs; we'll undoubtedly see companies close, allowing an HR 'smart hunt' for young startups, as in the past two years, startups have had a hard time finding good people with average salaries. Hiring good people and building a tangible pipeline will make promising startups even better with less money spent. When looking at the following trends, I believe the trend will be the opportunities that will arise from the economic distress.
My advice to the startup/founders is the following: Spend only what you need. Be really smart in what you're spending money on. Make sure it adds value. Do not raise with a HIGH valuation! Founders need to honor their stage, meaning you should raise based on what you have and where you are currently. Even before you finish your current round, founders should be thinking about how to raise your next round. And for the investors, don't be scared. This is the best time to be an investor.” Lee Moser, Managing Partner, AnD Ventures