# 2022 VC / Tech Slow Down

**Published by:** [jelca thinks](https://paragraph.com/@jess/)
**Published on:** 2022-05-02
**Categories:** other tech
**URL:** https://paragraph.com/@jess/2022-tech-slowdown

## Content

Public markets have pulled back significantlySaaS multiples dropping from ~20x revenues to closer to ~10xSimilar to pre-COVID levels (~2020)Private markets also pulling back significantlyDeal data is a trailing indicator - data not released for at least a quarterStill was hitting fundraise highs and deal count highs in Q4 2021Very large drop in funding in Q1Trickle down effect from IPO to growth to venture dealsHigher concentration of smaller size / earlier deals (seed/angel) in Q1 2022Check sizes smaller but deal counts still high in this spaceExit opportunities with early stage companies are still very far awayCrypto largely separateExplosion of web3 based funds means lots of capital ready to deploy in different vehicles from equity to tokenVenture funds have a lot of money / capital is still a commodity and in excess. Where is it going?Worst caseFund closes, LPs renegeBase caseSlower fund deployment in the next year or so, accelerating again when the markets pick back upIncreasing positions in existing portcosSecondary opportunitiesOtherIncreased consolidationSmaller companies with 0 traction or product will be wiped out. Only those who have a superior product will be able to raise wellPush and pull of power - not a founder's world anymoreWhat will valuations look like? Round sizes?Normal is a relative term. The new normal may not be the same as 2020 / pre-COVIDVCs are figuring it out too. Definitely not the 100x revenue or $100mm valuation for a pre-revenue company. Not sure though. Will come down thoughRound sizes very likely to come downWhat founders should keep in mindBurn / cash management. Most 2020-2022 founders have not seen a slower market. Managing in bear and bull markets are critical skillsChanges to the hiring landscape as less people want to join techThis may also be a short correction. Not sure. Either way just some trends, observations, and things to keep in mind. The market moves in cycles. We must all be aware so we can navigate all of them.

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