Welcome to Q4, friends. If you were hoping to start the final part of 2022 with good news, tough. Instead, we start the quarterfinals with some serious information.
Of course, we’re awaiting data from CB Insights, Pitchbook, and Crunchbase on Q3 venture capital totals, but one distinct bellwether indicator we’re tracking here for the exchange is weakness amid a holiday and event-filled race. until the end of the calendar year.
Today we are looking at feeding unicorns. Unicorns consume capital and excrete value, at least in theory, a relationship that has been at an all-time high over the past year. Huge, nine-figure venture capital rounds have been driven by crowdfunding investors and others piling into the startup realm, raising the valuations of many startups to stratospheric levels. Some of those bets have paid off, like the Figma Series E from last June. Many will not.
Important for our purposes, however, is that the rate at which unicorns are raising capital is slowing not only from last year’s best fundraising period, but even from the distant past. If unicorns can’t grow as much as they did this year, how many of these billion-dollar-plus startups will survive in 2019?
Not that we want to predict this early week of unicorn slaughter, but the data is troubling.
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Today, we consider Crunchbase data to determine where investor sentiment rests today, and then discuss what could break the logjam.
