founders and investors They are strongly supporting 2023 as the economy shows few signs of improvement. But there are many questions in the air: will dry powder VC trucks enter the market? Will there be more layoffs if the pressure on ratings continues? What’s in store for AI?
We can answer some questions, though: some trends are inevitable as artificial intelligence will remain, and the crypto market will continue to be under investigation even as it looks to the future. There are other unchanging aspects of the venture world, such as the lack of funding for minority and women founders.
We spoke with three active black investors to find out how minority investors are planning for 2023. For Xfund Vice President Jadyn Bryden, the creative economy is one hot spot to watch in the coming months. “I expect to see continued activity in the creative economy as more people step out to build their own brands and rely on new tools for content creation and monetization,” she says.
Alexis Alston, principal at Lightship Capital, thinks the future is bright for companies that build technology to help others do business and cut costs: “As fast-growing tech companies start to drive costs out of the way, I think we’ll see strong growth.” A shift to companies that rely more on sales optimization and content creation tools, replacing previously redundant teams.
But the investors have given up on the allocation of capital to black innovators in the coming year.
Richard Kirby, general partner at Equal Ventures, expects more diverse founders to receive funding next year, but he doesn’t expect much change. “I think a lot of the narrative that a lot of investors put out about investing in more black founders is mostly just talk, not a lot of substance or actual dollars flowing to black founders.”
We talked to:
Alexis Alston, Principal, Lightship Capital
Which sectors will you continue to monitor, and which trends do you expect to emerge in the coming year? why?
I have always been interested in the ever-expanding applications of AI, including generative AI, natural language processing, and deep learning. I look forward to seeing how AI can contribute to enhancing previously human-driven areas of business such as sales, social media, marketing and content development.
As the fast-growing tech giants begin to reduce outsourcing costs, I think we’ll see a strong shift in companies relying more on sales optimization and content creation tools, replacing previously redundant teams.
What is the most pressing political issue you are following and how will it affect you as an investor? Would you support a startup that addresses one of these issues?
There is a deep sense of urgency now resonating around the lack of political control or expectations for new technological and financial products. Across everything from hedge funds to cryptocurrencies, there’s a profound lack of regulation that’s only now beginning to tickle the boxes for many institutional and consumer investors.
As an investor, the lack of oversight has led to extremely high valuations and potential upside in these emerging markets. In the end, the everyday angel investor (who tends to be more representative of the public than institutional investors) gets the short end of the stick every time.
With less than 1% of venture capital going to black founders, do you think next year will be any different? Why or why not?
I’m not sure next year will be any different. If anything, I’m more concerned that the number will decrease by 2023 as institutional funds tighten their wallets or start looking for founders who often exclude black founders.
