#80 Closing Q2 w/ Playbooks, VC Fund Models, Budgets. +Q3/Q4 Outlook

Hi Everyone! đź‘‹ Welcome to the new members of @TheFundCFO crew! We recently released our New VC Fund Playbook + Model Downloads @ Streamlined.Fund! Re-linking our top 2023 posts: #67 Top VC CFO Posts & References of April, #65: WTF is Going On in VC (+ New Fund Model Data) & #60 Emerging VC Fund Tech Stacks!

Every Tuesday/Thursday, we bring you actionable tools, real-world experiences, and insider insights for #VC CFOs/Finance Pros and fund managers, #LP investors, and general industry enthusiasts/people who want to learn :).

“Not knowing you can’t do something is sometimes all it takes to do it.” -Ally Carter

The Quarterly Closeout

Now it’s time to close Q2’23! At the end of each quarter, we look back at the past three months, professionally and personally. What worked well (celebrate the wins!) and what didn’t? What can we change to make the next three months even better?! We looked back at our most impactful posts from Q2, which included the following:

We wrote more about this in #77 VC CFO Q2 Review / Q3 Key Action Items - highly recommend checking out if you haven’t already! You can also read more about our Key Action Items for Q3’23 and how we’re setting up to win H2’23!

VC Funding Down to $27.6b in Q2 (-40% vs. Q2) - Update Your Models

As you update your VC fund models and budgets, it’s important to be market-aware. While the S&P 500 (+15%) an NASDAQ (+31%) have ripped in 2023, the VC funding market is still down. Good for VC fundraising, not good for VC portfolio co.’s that need to raise more money. As you update your fund models, this means adjusting forecasts such as graduation rates, time between rounds, etc.

“VC funding decreased in the second quarter, which ends tomorrow, according to new data provided to The Information by Crunchbase. U.S. startups raised just $27.6 billion compared to $45.2 billion in the first quarter, representing a roughly 40% drop. Compared to the same period last year, it’s an even more substantial plunge of 55%.”

“In total, U.S. startups have raised $73 billion so far this year, indicating that 2023 fundraising won’t even come close to last year’s $215 billion raised, which itself saw a big drop from 2021, a record-setting year. There are reasons to be positive, though.” Kate Clark, The Information

VC Outlook for the Rest of 2023

Pitchbook recently released their US Venture Capital Outlook: H1 Follow-Up report. Back in December, they made a list of predictions for the US VC industry in 2023. This is a fresh look at their 2023 predictions (check the report for the latest takes):

  • Unicorns will have a negative return in 2023

  • Series C and D rounds will see the most down rounds (starved for capital)

  • Seed-stage startup valuations and deal sizes will rise

  • SPAC IPOs and mergers will decline

  • Venture-growth deal value will fall below $50b in the US

  • US VC mega-round activity will fall below 400 deals, hitting a three-year low

  • US VC fundraising will fall between $120 billion and $130 billion in 2023

Fourth of July - Origins, Early Celebrations & Traditions | HISTORY

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