Cartoon: Relief
“Relief” by Iantoons
This new cartoon illustrates that the surviving company founders and investors from the ‘mass start-up extinction’ event might still not be ready to invest for growth.
In 2023, about 3,000 venture-backed start-ups shuttered globally (up from 467 for all of 2022). January emerged as the nadir for seed-stage, Series A, and Series B companies shuttering, while February saw the highest shutdown rates for Series C and beyond.
Tom Loverro, who recently published his ‘Great Reawakening’ thesis on social media, remarks: “We have to get out of our Stockholm Syndrome, and get back to thinking: ‘Hey, maybe it’s okay if my start-up burns a little more money’.”
Spurring on this sentiment is that four technology start-ups – Astera Labs, Reddit, Ibotta and Rubrik – currently are all trading above their IPO prices. However, Jeremy Glaser, a lawyer and co-chair of Mintz’s venture capital and emerging companies practice, says: “I don’t know if we are there yet. We have some positive signs, but we need to see more companies staying above the IPO price for an extended amount of time.”
Also, the start-up market is not universally similar, with some sectors already experiencing growth (e.g. AI), while others (e.g. fintech) remain in the doldrums and have low growth sentiment.
Nik Milanović, general partner at The Fintech Fund, says: “A lot of people who were writing blog posts three years ago about fintech being the future are now writing the same blog post about other areas.”
You can find more Iantoons cartoons here.
