Here on the eve of Thanksgiving in the United States, this column spent much of the morning looking for something to be thankful for in startup land.
There are options: The world has never been more software-centric, meaning the core startup product is well aligned with long-term macroeconomic trends. That is good. The consumer is also standing firm better than some expected given the global backdrop of rising interest rates and hard-to-contain inflation. And despite endless calls for a recession, tomorrow or the day after after, major economies in technology continue to grow.
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Unfortunately, for many startups, the news is generally more negative than positive. For example, investments in technology are falling, valuations are falling, IPOs are frozen, there are many layoffs and start-ups that decided to postpone fundraising because of turbulent market conditions may lose out. (The good news version of this point is that some startups did increase during the first quarters of the current tech market recession, which turned out to be the right move in the end!)
Dates from Forge’s November 2022 report — the company operates a secondary market for trading technology stocks in the private market — indicates that startups that went up earlier in the current downturn ended up accumulating fewer down rounds and receiving better overall prices than their more restrained brethren.