TLDR:
- Sequoia predicted slow recovery for tech start-ups two years ago
- US start-up sector facing significant funding drop since dotcom crash
Venture Capital Dry Powder Has Nowhere to Go
The article discusses the current challenges faced by the start-up sector, especially in the US, in terms of securing funding. Two years ago, Sequoia, a US venture capital giant, delivered a warning to tech start-ups about the slow recovery ahead. They mentioned that the kind of support provided during the pandemic would not be repeated, and cheap funding was no longer an option. The prediction has turned out to be correct, as the US start-up sector is now experiencing a significant decline in funding, similar to the aftermath of the dotcom crash.
The article highlights the concept of “dry powder,” which refers to the unallocated capital in the venture capital space. With the current downturn and lack of investor interest, this dry powder has limited avenues to be utilized. The start-up sector is urged to take responsibility for underestimating the impact of the downturn that hit public markets.
Overall, the article emphasizes the challenges faced by tech start-ups in securing funding, the impact of the current downturn on the sector, and the implications of the dry powder situation in the venture capital space.
