The investors also shared their deployment strategies for 2024 in the current economic climate. Some are adopting a more selective approach, focusing on capital efficiency, while others see increasing opportunities in secondary markets due to liquidity pressure. Regarding startup valuations, some predict more recapitalizations and down-rounds in 2024, especially for startups with inefficient business models. However, sectors like climate tech are expected to continue seeing valuation premiums. The divide between AI-related deals and others is expected to become more pronounced in 2024.
Key takeaways:
- The year 2023 was characterized by a great venture divide, with extremes emerging on either side of the spectrum in the startup industry.
- While most startups struggled to fundraise, those in AI or defense sectors could raise money easily, and despite low exit levels, some top companies managed to exit through IPOs.
- Investors have differing views on trends for 2024, with some expecting a return of exits and others predicting no meaningful liquidity until 2025. Opinions also vary on the future of AI investing.
- Investors are adopting different strategies for 2024 based on the current economic climate, with some focusing on new investments, others on secondary markets, and some on seed and Series A opportunities.