A Look Back At Venture Capital In 2022

Jan 2, 2023

This year in Venture Capital was a tale of two halves. For some perspective PORTAL’s very own Managing Partner and 20-year VC veteran, Peter Loukianoff, shares his biggest takeaways. “The first half of 2022 was gleaming with valuations high and projections even higher paired with a booming crypto and NFT market. VC fundraising was on a record pace with $150.9 billion raised across 593 funds in the first three quarters of 2022. But, by summer the tide started to turn and we saw startups lowering valuations and raising more cash in anticipation of a difficult 2023,” he shared.


IPO Domino Effect

The public market affects startups more than people may think. “When IPOs slow down, later stage investors who were betting on receiving liquidity in a few years with 3x+ multiples on their investments are now having to wait longer, which reduces their internal rate of return (IRR),” said Loukianoff. “That immediately starts to affect late-stage prices, which consequently results in lower mid and early-stage valuations.”

The ‘Right’ Valuation


A Wrap on 2022 and a Look Ahead

While 2022 marked the beginning of a recession, this correction is needed and ultimately healthy for the venture capital market. As in prior downturns, this period will be a good time to invest in growing early-stage startups with more reasonable valuations.” And, with abundant capital available for later rounds, there is arguably less financing risk.