Public markets influence private venture capital
Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by Reuters in an article—by Niket Nishant and Mehnaz Yasmin, “U.S. Startup Valuations Contract as Early-Stage Investors Turn Cautious”—regarding how a decline in initial public offerings and public stock market prices affect venture capital sentiment.
The article was also picked up by U.S. News & World Report, Yahoo, and Venture Daily News, amongst others.
Where are venture capital valuations?
As much as we like specific venture capital (VC) funds and structures for the long-term, we currently see a renewed reluctance to invest in some venture backed business—like delivery models—that are difficult to scale and reliant on huge quantities of labor and people handling equipment. Conversely, we see a tilt towards software, intelligent drones, machines, and robotics that can supplement or enhance labor.
We have also seen some interesting venture trends in crop sciences aimed at reducing water use and improving agricultural hardiness as weather patterns shift—such endeavors seem especially timely.
I don’t expect lofty venture capital valuations to recover much ground in 2022.
Quoted article excerpt is below:
“VC managers are looking for low or advantageous pricing so they can achieve their targeted multiples, which may take longer since the IPO market has slowed,” said Michael Ashley Schulman, chief investment officer at multi-family office Running Point Capital.
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