OFF-MUTE 🔈
🔥 Last year’s record-breaking IPOs, SPACs and venture rounds were irrationally high (and not sustainable).
🥶 Now, the tech market is cooling off but investors and companies are still flush with cash. Is it for the better or worse?
🎙️Earlier this week, our CEO Beth Monaghan and President Jason Morris co-hosted a virtual “Meet the Press” panel event with highly regarded business and tech reporters including Mary Ann Azevedo, senior reporter at TechCrunch; Luisa Beltran, reporter at Barron's; Kenrick Cai, senior tech reporter at Forbes; and Dan Primack, business editor at Axios.
💼 📉 This group knows the ins and outs of these mega financial deals and the trends driving them.
👀 Here’s what they’re seeing so far in 2022:
💀 IPOs are dead. “IPOs have performed terribly. If you look overall, there’s been a correction in the tech market over the last six months but if you look at IPO performance over the last two years they’ve underperformed,” said Dan.
🤑 Funding is still flowing. IPOs are stalling and “venture is where everything is going,” according to Luisa.
💔 Split on SPACs. Mary Ann sees companies moving away from SPACs altogether while Luisa thinks they’ll stick around. Luisa said, “We’ve had SPACs for 20 years. They are a viable route to go public. Despite that markets are down, I think they are here to stay.” She also pointed out that SPACs “have always been very speculative.” ICYMI: The SEC announced yesterday that they are proposing new rules for SPACs.
🔌 It’s a market reset; not a recession. “Even if we were to head into a recession, it will be a lot milder than what we saw in the early 2000s. We haven’t had one quarter of negative growth, let alone two,” said Dan.
⏰ Investors are doing more due diligence. "Investors are taking a longer time before just writing checks...there's a more thoughtful approach right now to venture investing," said Mary Ann. Crypto is the exception. Dan said, “Due diligence doesn’t exist in crypto investing.”
🚫 Direct listings aren’t for everyone. They are reserved for the well-known and well-funded. For these reasons, “there aren’t many companies that can do direct listings,” said Luisa.
🗺️ Startups beyond Silicon Valley. “I’m always intrigued by other regions popping up and growing as tech hubs. I think it’s great when a company isn’t based in a traditional tech hub. I think we’re going to see more of that,” said Mary Ann.
🌈 Inclusion is the future. Mary Ann also said, “I’m drawn to companies that have a real inclusion component…tech that helps everyone gets me excited.” We feel the same way!