After seeing an aggressive uptick in venture capital funding in 2021, these levels have continued to fall throughout 2022. Does this mean investors are starting to back away from venture capital deals? Not necessarily.
While today’s investors are taking a more selective approach to VC investments, funding is still significantly higher than in 2020. All signs show that 2023 is gearing up to become a substantial market for VC funding. The trick for investors is to know where to invest their funds to generate the most significant returns.
Equity Crowdfunding Will Continue To Grow And Change Venture Capital
At a time of rising interest rates and complex loan approval processes, it’s not surprising that many entrepreneurs are skipping the traditional bank loan option and heading straight to venture capital financing opportunities. Fortunately, investors are just as excited to oblige and provide these startup companies with much-needed funds.
Large Deals Will Create More ‘Unicorns’
Another trend in the VC market is the growth of “unicorn” startups, emerging companies with a $1 billion value or more. In 2015, there were less than 150 unicorn companies in the market. Today, there are more than 2,000 companies.
Venture Capital Will Continue To Shift To International Markets
For decades, VC investment opportunities primarily remained with companies within specific regions within the United States. For instance, in 2021, the vast majority of VC-backed funding in the United States was limited to companies in only a few states, including California, New York and Massachusetts.
2023 Outlook for VC
The venture capital outlook is strong for 2023. However, investors have shifted away from early-stage startup campaigns and invested more money into long-term opportunities during the late-stage phase. The important thing is to do your research and continue to follow the latest trends, so you can determine where to find the best investment opportunities.
