Hello, and welcome back to Equity!

The podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. So, what happened in venture capital during Q2 2023? A lot, and not very much.

A Calm Quarter: Not a Good Sign

The TechCrunch+ crew has been busy as bees in a meadow trying to get our heads around the data. So, we got PitchBook venture guru Kyle Stanford to come back on the podcast to riff with us on the good, the bad, and the late-stage.

American Venture Performance in Q2 2023

How did American venture perform in Q2 2023? The answer is a resounding "not very well." The venture capital industry has been plagued by a slow pace of deals, and the lackluster performance is not a good sign for the future.

The New Normal: A Bad News Story

Welcome to the new normal, where venture capital fundraising is becoming increasingly challenging. This shift away from the high-flying days of 2021-2022 has significant implications for startups and investors alike.

Seed Deals Faring Poorly

But how are seed deals faring in this environment? Unfortunately, they’re not doing much better than later-stage transactions. The slow pace of investment is causing a ripple effect throughout the ecosystem.

Exits: A Problematic Trend

How bad is the slow pace of exits today? It’s not just a minor hiccup – it has significant implications for venture capital fundraising itself. Exits are essential to the venture capital model, and without them, the industry is facing an existential crisis.

The Impact on Fundraising

What impact will these stagnant exit rates have on venture capital fundraising? It’s likely to be severe, with many funds struggling to close their next round of investments. This could lead to a vicious cycle where fewer startups are able to raise funding, further exacerbating the problem.

Green Shoots? Maybe…

But is all doom and gloom? Not quite yet! There are some green shoots popping up on the horizon. These may not be as robust as we’d like, but they’re still worth noting.

What’s Good News in Q2 2023?

Here’s a rundown of what could be considered good news from Q2 2023:

• Increased investment in AI startups: Despite the slow pace of deals overall, there is a bright spot for AI startups.
• Growing interest in cybersecurity: As more companies prioritize security, we’re seeing an uptick in funding for cybersecurity startups.

A Rundown of Q2 Data

You can read the underlying dataset we were riffing on here. It’s not pretty, but it gives us a clearer picture of what’s going on in the venture capital world.

We’ll Be Back with More News!

Stay tuned for our next episode, where we’ll dive deeper into the Q2 data and discuss its implications for startups and investors alike. We’re back on Friday with the news roundup!

Subscribe to Equity!

Equity drops at 7 a.m. PT every Monday, Wednesday, and Friday. Subscribe to us on Apple Podcasts, Overcast, Spotify, or all the casts. Follow Alex Wilhelm and Theresa Loconsolo on Twitter for the latest updates.

Read More Episodes of Equity!

For episode transcripts and more, head to Equity’s Simplecast website.