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Raising Capital Could Become Tougher In 2023. Time For Entrepreneurs To Think Boldly!
Fundraising slowed down significantly in the first half of 2022 as capital became more expensive, Russia’s invasion of Ukraine became more serious, and markets and entrepreneurs accepted the ongoing recession.
According to the Financial Times, companies around the world raised $4.9 trillion in the first half of 2022 through new bonds, loans, and equity. This represents a decrease of 25% from the $6.6 trillion raised in the first half of 2021.
At the end of May 2022, Pitchbook, the venture capital, private equity, and M&A database, published its Global Private Fund Strategies, summarizing private capital fundraising activity. According to the report, Q1 2022 private fundraising figures were less than one-quarter of total 2021 fundraising, indicating a slowdown. This, however, does not indicate the market is “nose-diving.” The total VC funding in 2021 was $620 billion, a 108% increase from the year before. The number of private Unicorns valued at $1 billion or more rose 69% in 2021 reaching 659 globally. This number of high valuation companies is not only insane but also unsustainable as it is not based on realistic profitability and market value creation.
While many unicorns still have capital available, the majority will need to hit the markets again…
