Watch: A conversation on capital markets in 2023

On Thursday, December 8th, Axios business editor Dan Primack and technology & business reporter Kia Kokalitcheva led conversations evaluating the factors shaping capital markets in 2023. Guests included NYSE global head of capital markets Michael Harris and Sapphire Ventures president, partner and co-founder Jai Das. Our View from the Top sponsored segment featured Cooley partner Christina T. Roupas.

Michael Harris described his thoughts on when the IPO window would return and what investors are going to be looking for in companies going forward. 

• On how the 2022 market differs from the market in 2021: “2022 is a very different environment that we’re in. There is a number of pressures that are at the forefront of investor’s minds, most of them macro-related, whether that’s the inflationary environment, a rising rate environment, supply chain issues, tensions with China.”
• On appealing to investors: “I think profits are one part of it, but I think it really goes back to the idea of visibility. And I think the more that companies can demonstrate, whether that’s from a cash flow perspective, from a top line or a bottom line perspective, I think it’s more about being able to talk to the marketplace about visibility into their operations and the ability to actually demonstrate that over a very uncertain business cycle that their model can hold up.”

Jai Das discussed whether he expects the current slowdown to continue into next year and the factors behind the current deceleration in the growth equity market.

• On whether the slowdown will continue: “We do think that in 2023, things will open up a little bit. First and foremost, I think a lot of CEOs and founders have come to the realization that maybe they should take some capital at a valuation and multiples that are, you know, not similar to what public market companies are trading at. And second, I think there’s so much money sitting on the sideline that people will start making investments.”
• On when he expects the IPO window to reopen for tech companies: “I definitely think in the second half of next year because I think, you know, if you look at it, there will be companies which are 200 or 300 million in revenue growing at 40, 50%, and there’s a fair number of them out there.”

In the View from the Top segment, Cooley partner Christina T. Roupas highlighted some of the trends and industries to watch heading into next year.

• “I do believe we will continue to see the life sciences and biotech sector being able to successfully complete IPOs and follow on offerings, but I certainly don’t believe those are going to be the only deals we’re seeing get done. A real focus of investors, particularly in this part of the market cycle, is going to be on cash-flow positive companies who are able to show a track record of profitability, and so what that means is we might start to see the markets opening with companies in more traditional industries. Manufacturing, for instance, is an area where we do expect to see some transactions get done next year.”

Thank you Cooley for sponsoring this event.