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With more uncertainty around budgets and sales cycles, investors will spend more time assessing deals that are able to withstand a time of economic hardship, which means that companies with critical productions and solutions will be prioritized, according to securityweek.com.
Jake Heller, partner at KKR and head of tech growth equity Americas, believes the impact is unlikely to be felt evenly. “We have already seen the pullback in public markets affecting fundraising for some growth and early-stage companies,” he said. “In general, we expect the tightening of funding conditions to continue into 2023; however, we believe that capital will continue to be available to entrepreneurs and management teams who are able to effectively manage costs and allocate capital to growth opportunities with high potential for returns.”
“Market conditions had a dramatic impact on 2022 funding rounds, and we aren’t out of the woods yet,” says Yoav Leitersdorf, managing partner at YL Ventures. “The fallout is trickling from the top down. IPOs dropped this year from thousands to just over 100, the lowest number since 2016. There was a near stall in growth stages and a significant slowdown in Series C and D rounds, a steep decline in Series B rounds and a struggle to raise significant Series A rounds,” he stated.
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