2024: Resilience Unleashed – A Startup and VC Reckoning

TLDR: The year 2024 presents both challenges and opportunities for startups and venture capitalists, according to Umesh Padval, managing director at Thomvest Ventures. The early part of the year is expected to be challenging for private companies due to a global economic slowdown, higher interest rates, and increased conservatism among venture capitalists. Oversupply of capital in 2023 has already resulted in the shutdown of more than 3,200 venture-backed startups. However, well-funded private enterprises will benefit from a large talent pool as public companies streamline their operations and reduce their workforce. Investment banks are expected to experience a resurgence in 2024, driven by mergers and acquisitions as large public companies target strategically aligned startups for acquisitions. The IPO market is also predicted to open in 2024, with numerous private tech companies engaging in secondary sales to provide liquidity. The low-interest-rate environment and increased allocation to the venture category among limited partners have led to the proliferation of new venture funds. However, the lack of exits and the increase in company shutdowns may result in the demise of numerous venture funds. The continued impact of generative AI is expected in 2024, with enterprises focusing on operationalizing AI across their product lines. Valuations for AI companies are anticipated to undergo a correction as initial FOMO-driven investing settles down. Overall, 2024 promises to be a year that demands strategic acumen and adaptability from all stakeholders in the venture capital industry.