As we moved through Q2 2023, the venture capital landscape is demonstrating positive momentum. While larger Limited Partners are exercising strategic caution, smaller Limited Partners seized the opportunity to back emerging VC managers, backing new and emerging managers worldwide. Early-stage startup valuations offered favorable entry points, and later-stage startups that cut costs have been attracting fresh capital. AI companies have amassed significant funding and valuations, proving immune to market volatility. Across the globe, venture capitalists report that this is potentially the most favorable investment climate they’ve ever experienced.

The question beckons, what’s on the horizon for Q3 2023?
As we move into Q3, the landscape is shifting again. Where will the pendulum swing next in the world of venture capital? What are the trends that will redefine Q3 2023?

Vote on the Trends

Please select up to three crucial trends for Q3 2023 from the given choices, and press “Submit.” VC Lab will curate and publish the survey results. Join us on Wednesday, June 21, 2023, for an in-depth discussion of this year’s critical venture trends.

Q2 2023 Trends

• Big LPs Tread with Caution: Despite a bullish market, larger Limited Partners (LPs) maintain a careful stance towards investing in Venture Capital (VC). This cautious approach has driven a conservative investment trend in Q2, reflecting concerns about the potential risks in the venture sector.
• Emerging VC Managers Gain Traction: While large LPs are showing caution, smaller LPs have pivoted to embrace emerging VC managers. This shift reflects a strategic move to diversify investment portfolios and tap into potentially high-yielding, albeit risky, new venture initiatives.
• Early-Stage Startup Valuations Take a Dip: Early-stage startup valuations have seen a sharp decrease by around 40% in Q2, making them more attractive to risk-tolerant investors seeking to capitalize on lower entry points.
• Cost-Efficient Later-Stage Startups Secure Capital: Later-stage startups that have made significant cuts to their operational costs have found success in securing capital. Investors, in their search for resilience and efficiency, are placing their bets on these lean enterprises.
• Skyrocketing AI Valuations: Companies specializing in artificial intelligence (AI) continue to command massive valuations, despite the overall caution in the venture scene. Their success is a testament to the faith in AI as a transformative force in the modern world.