Watch: A conversation on what's next for VC
The big picture: On Thursday, November 16, Axios business editor Dan Primack hosted virtual conversations looking at what's next for VC in 2024 following 2023's dealmaking slowdown.
- Guests included Sapphire Ventures managing director Rajeev Dham and Oak HC/FT co-founder and managing partner Annie Lamont.
Why it matters: This year, venture capital firms saw ups and downs amidst economic uncertainty, inflation and political turmoil, with the slowdown in deal activity impacting investment in some industries more than others.
Annie Lamont expressed optimism for 2024 following 2023's market difficulties.
- "I think it's a bipolar market and that great companies will get funded and do well, and those that are good companies or highly challenged companies will either go away or they will be consolidated. So I do think it's going to be a very active year next year. The 2021 money is running out by 2024, and I think there is going to be a lot of consolidation in a good way."
Rajeev Dham described his outlook for M&A activity next year following the small number of IPOs this year.
- "Most companies are just trying to get a handle around their operating performance and operating cadence first and foremost, and making sure the metrics and predictability of the business is clear, and so that's the advice that we give. Secondarily, IPO is just one of many financing or even liquidity alternatives, M&A will become a more popular alternative as companies that were overfunded are realizing that the growth rates are just going to be materially different going forward."
In the View from the Top sponsored segment, Cooley partner and head of New York corporate practice Adam Dinow explained the differences between what investors were looking for in investments today versus in 2021.
- "I would say the big difference is that in 2021, it was all about growth … And now the buzzword that we're hearing in boardrooms and elsewhere and investor pitches is how can we make money? How can we make our cash stretch out as long as possible, whether that's getting to break even or either profitability, how can we make the dollar stretch? And so I would say companies are in a tough spot because they do need to make the dollars stretch as long as possible, while at the same time still showing investors that their company is an appealing and attractive investment opportunity."
Thank you to Cooley for sponsoring this event.