Looking for a Ride
“Looking for a Ride” – a cartoon that illustrates how VCs are shifting their investment strategy in the last quarter.
CB Insights reported a 23% global decline in venture funding this quarter, compared to last.
Some of the most significant pull-backs are hedge funds that became very active investors in venture capital as a way to seek yield.
For example, Coatue Management saw a 24% decline in the number of deals in Q2 compared to last year – and the infamous Tiger Global (which was making an investment a day last year) saw a 4% drop in deal volume.
The primary segment of the market impacted by this are mid stage startups, who are having a particularly torrid time.
These companies became used to hedge funds leading rounds at premium valuations, with compressed due diligence.
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