Q1 2022 financing figures are out. The threat of higher interest rates has put pressure on deal activity (and valuations – see our What got us talking/must read section after). Geopolitical tensions in Europe have blurred the financial picture. The Russian invasion of Ukraine caused dealmakers to push the pause button for several weeks. While that pause is still in effect for Europe, particularly for late-stage funding, the market is moving again in the U.S. (source: Pitchbook, Q1 2022 US PE Breakdown).
In this new context, well-known risk factors such as inflation, supply chain shortages and the pandemic are again under the spotlight and need to be carefully analyzed when considering a potential transaction. But in assessing the differences between a good and a bad asset by an investor, other imperatives have emerged such as the way target companies tackle climate change and report on it in an objective and transparent way. Hence the need for new grids for performing hard due diligence.
We imagine here what could go wrong for Tech as we move through Q2 in order to be better prepared through the exploration of 3 risk factors for investors and entrepreneurs - falling growth rates, inflation and supply chain shortages and COVID-19 - to break things down and ask the right questions to help founders and investors make critical strategic and funding decisions.