Dear all,
First I would like address you my most sincere wishes for this new year, and would like to take a moment here to thank all our clients and partners at the firm. We constantly strive to anticipate your changing needs and to develop new services, and will continue to do so in this next year. Also a huge thanks to my team members who demonstrate continued dedication to the project and whom make it all possible.
2022 was hard, and perhaps more than hard I would say brutal. After two years of strong growth across the Private Markets, this was put on pause in large part due to macro-economic and geopolitical headwinds. These will remain in 2023 as we are still in the middle of the macro-economic cycle we entered in Q2 2022, and macro-economic timelines may seem longer than what Tech has used us too. But we are much more prepared and aware at this point which allows for cautious optimism in my view.
Tech was hit perhaps the hardest in 2022. The fact that money has become much more expensive particularly impacts these companies for which a core part of value creation rests in future earnings and Tech valuations were slashed in the public markets (see our What got us talking section below) and in the private markets for those companies that underwent financing rounds. Overall, 2023 will be a tough year for Tech as this will continue to materialize as companies will be forced to raised funds, not just because they are running out of cash but also so as not to lose ground.
To survive, companies will have to win the race to resilience. That may seem like a grim short-term prognosis, but we think this will lay a stronger long-term foundation. This will result in more robust economic models and back-to normal valuations that set the ground for deal-making to pick-up again. Better due diligence will help investors not only assess risks, but also confirm this robustness, reveal opportunities, and bring a (welcome) second pair of eyes.
So on for more adventures and have a great read!