Dark
Light
Today: September 30, 2024
August 15, 2024
1 min read

Silent Startup Recession: The Untold Story of Venture Capital


TLDR:

  • Startups and venture capital are currently in a recession similar to 2008.
  • Many VC-backed startups have gone out of business, with a significant increase in closures in the first quarter of 2024.

The article discusses the current state of the venture capital and startup ecosystem, highlighting the silent recession that is taking place. While the media may not be focusing on this issue, data from Carta shows that between 50% and 70% of VC-backed startups went out of business last year, with a higher rate of closures in the first quarter of 2024. The recession is attributed to a rapid rise in interest rates, unexpected by many in the industry, leading to layoffs and shutdowns.

Despite the challenges, there is also an opportunity for innovation and growth. Investors are now prioritizing sustainable growth and profitability, which could lead to a more resilient and disciplined market. The industry is at a crossroads, with the potential for those who adapt to new norms to lead the next wave of entrepreneurial success. Companies born during recessions, such as Airbnb, Uber, Netflix, and Microsoft, have historically outperformed, indicating a potential for strength among startups founded in 2023 and 2024.


Previous Story

Navigating the Venture Capital Terrain: New vs Established Funds

Next Story

Venture capital data won’t reach 2022 levels for years: Analyst

Latest from Blog

Growing Cerity Partners: Merging with $15B VC Firm

TLDR: Cerity Partners merges with Touchdown Ventures, expanding venture capital capabilities Merge will enhance offerings to corporations and businesses, as well as private clients Cerity Partners, an independent wealth management firm, has
Go toTop