Early-stage investments are way down in 2023. What you need to do if you want investment.
Although the final totals for venture investment for the year won’t be published for a while, there’s no doubt 2023 was a painfully slow year.
According to a Crunchbase report, seed and angel funding in 3Q23 was down 27% in dollars from the previous year. The number of deals fell even more dramatically by over 40%. Dollars and deals invested have continued to decline every quarter since the beginning of 2022.
Outside of life sciences, the startup landscape was a wasteland for both founders and investors.
In a typical year, I invest in 6–8 startups. In 2023, I invested in 2. The two angel groups I’m involved in together usually invest in around 15 companies per year. This year, we invested in 7, almost all in life sciences.
In my portfolio of around 150 investments, it’s been more than a year and half since I’ve had a positive exit. That means any new investments have to come out of my retirement savings instead of reinvesting the winnings. The bar is obviously higher now than when I’m playing with house money.
However, I’m ready to invest in the right opportunities. My angel groups have funds sitting in the bank ready to deploy. Nevertheless, it’s hard to find anything we want to invest in.
2021 Was a Bubble. It’s Over.
Yes, I hear you. Tens of thousands of founders waving their arms, screaming as loud as they can, “Over here, look at us, invest in us, we’re ready to take your money.”
I hate to break it to you, but most of you are not ready. The ones that are ready are not offering attractive terms.
In 2021, the stock market was on a tear. The SPAC bubble meant any company could go public with an absurd valuation. NFTs and Web3 made random doodles worth millions.
Companies were getting acquired or going public at crazy valuations. Every exit meant hundreds of millions of dollars to reinvest in new startups. Big companies were setting up billions dollar venture investing arms. Retirement funds and family…