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VC Quantitative Perspectives

Q1 2022

VC Quantitative Perspectives

March 10, 2022

VC Quantitative Perspectives
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Quantitative Perspectives: US VC braces for possibility of slowdown

Despite the breakneck momentum of the past two years, 2022 has ushered in some potential headwinds for the venture capital industry. Depressed equity markets, a prominent theme of inflation, and geopolitical turmoil are all contributing to uncertainty. 

Our latest Quantitative Perspectives report dives deep into how the US venture industry may be able to weather these difficulties. The report also offers a closer look at public market movements, which have historically been a good indicator of venture activity.

Key takeaways

  • Investors have left themselves vulnerable to valuation corrections by sacrificing protective deal terms in exchange for access to deal flow.
  • The prospect of increasing bond yields may reduce venture’s allure for LPs, but that effect will likely be tempered if inflation persists. 
  • VC investment outside of traditional funding hotspots accelerated during the pandemic as investment ticked up substantially in many states, including Vermont and Montana.