By Bunmi Olayanju MBA CFA

While the headlines have been awash with talk of a venture capital winter, it’s crucial to understand that it’s merely a season, not a barren period. The data shows that while the pace of fundraising might have decelerated in the past year and a half, there’s still a robust ecosystem of deals being struck across stages. For founders who can present their businesses credibly and compellingly, now could be an opportune time to secure the capital they need.

Let’s delve into why the current fundraising climate holds promise:

Abundance of Dry Powder: Latest data from Q1 2023 shows VC firms in the U.S. sitting on a staggering $303B in uninvested capital, a figure nearly double that of pre-pandemic levels. This reservoir indicates there’s ample capital seeking worthy ventures.

Momentum-driven Investments: After a period of caution, investors are eager to finish the year on a strong note or begin the new one with vigor. Given that VC earnings are closely tied to the multiples on their invested capital, there remains a consistent interest in bankrolling promising startups. Angellist’s Q3 2023 data underscores this, revealing a notable uptick in investment activity.

Favorable Valuations: Recent trends show startup valuations undergoing a correction, reaching some of the most investor-friendly levels in recent history. Lower valuations allow investors to reduce their investment costs, making their desired returns more achievable. Q3 2023 reports from AngelList and Carta suggest that median valuations remained consistent or even edged higher across venture stages compared to the preceding quarter. Furthermore, AngelList’s Q3 VC report points out that valuations, particularly in the early stages, might have hit a floor, offering a potential uptick in the near future. For investors, this presents a lucrative window to enter before valuations surge.

The Angel Impact: Angel investors, especially in the early stages, have become indispensable. Data from Carta highlights that checks amounting to less than $25,000 constituted between 31% and 59% of all pre-seed capital raised in the first half of 2023. This engagement level is poised to rise with the sizable  accredited investor base in the US and the increasing adoption of angel special purpose vehicles (SPVs), which offer a simplified and efficient medium for angels to pool resources and back startups collectively.

In conclusion, while cyclical downturns in venture capital can create an atmosphere of apprehension, they often conceal underlying opportunities. The current climate, with its abundance of uninvested capital, investor eagerness to achieve momentum, attractive valuations, and the significant role of angel investors, makes a compelling case for founders to actively pursue their fundraising initiatives. Armed with the right strategy and a clear understanding of the evolving investment landscape, founders can effectively navigate this VC winter, turning prevailing challenges into unparalleled opportunities.

Bunmi Olayanju MBA CFA is a finance expert and investor. Visit here to learn more about him

Direction by train/public transport

From Airport

Take shuttle (Routes 22, 33, 55 or 66) from airport to Blue Line Airport Station towards Bowdoin. Take it for 4 stops and get off at Government Station. Go upstairs & transfer to the Green Line D train towards Riverside. Get off at Longwood Station.

D Line Subway 

Take Green Line D train to Longwood Station. From station, turn left on to Chapel Street and walk up short hill to Longwood Avenue. Turn left on to Longwood Avenue. 

E Line Subway 

Take Green Line E train to Longwood Medical Area Station. From stop, proceed down Longwood Avenue toward the hospitals. (It is about a 10 minute walk from the Longwood Medical Area Station.) 

47 Bus 

Central Square to Cambridge/Albany St. Via South End Medical Area, Dudley Station & Longwood Medical Area Exit bus in front of Children’s Hospital. Proceed down Longwood Avenue toward Huntington Avenue. 

CT2 Bus 

Kendall Square Station to Ruggles Station Via Longwood Medical Area. Exit bus in front of Children’s Hospital. Proceed down Longwood Avenue toward Huntington Avenue. 

8A 

Bus Dudley Station to Kenmore Station Via Longwood Medical Area. Exit bus in front of Children’s Hospital. Proceed down Longwood Avenue toward Huntington Avenue.

Directions by car

From South of Boston 

Take I-93 North to exit 26 (Cambridge/Storrow Drive). Keep left at the end of ramp and take underpass to Storrow Drive. Follow Storrow Drive approximately 2.5 miles to Kenmore Square exit (on left). Bear right at end of exit ramp into Kenmore Square. Take leftmost fork at intersection onto Brookline Avenue. Follow Brookline Avenue approximately 1 mile (Beth Israel Hospital will be on the left) until Longwood Avenue. Take left on to Longwood Avenue and follow approximately ¼ mile. 

From West of Boston 

Take I-90 East (Massachusetts Turnpike) to exit 18 (Cambridge/Allston). Bear right after toll booth at end of exit ramp. Turn right after lights (before the bridge) onto Storrow Drive. Follow Storrow Drive (about one mile) to Kenmore Square exit. Bear right at end of exit ramp into Kenmore Square. Take leftmost fork at intersection onto Brookline Avenue. Follow Brookline Avenue approximately 1 mile (Beth Israel Hospital will be on the left) until Longwood Avenue. Take left on Longwood Avenue and follow approximately ¼ mile. 

From North of Boston 

Take I-93 South to exit 26 (Storrow Drive/North Station). Keep left at end of ramp and take underpass to Storrow Drive. Follow Storrow Drive approximately 2.5 miles to Kenmore Square exit (on left). Bear right at end of exit ramp into Kenmore Square. Take leftmost fork at intersection onto Brookline Avenue. Follow Brookline Avenue approximately 1 mile (Beth Israel Hospital will be on the left) until Longwood Avenue. Take left on Longwood Avenue and follow approximately ¼ mile. 

From Logan Airport 

Take Rte. 1A South through Sumner Tunnel after leaving Logan Airport. Watch for detour signs that periodically direct traffic north before allowing access to Rte. 1A South. After tunnel, turn right onto I-93 N. Follow I-93 N about 1/4 mile to exit 26 (Cambridge/Storrow Drive). Keep left at end of ramp and take underpass to Storrow Drive. Follow Storrow Drive approximately 2.5 miles to Kenmore Square exit (on left). Bear right at end of exit ramp into Kenmore Square. Take leftmost fork at intersection onto Brookline Avenue. Follow Brookline Avenue approximately 2 miles (Beth Israel Hospital will be on left) until Longwood Avenue. Take left on Longwood Avenue and follow approximately ¼ mile.

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