The crises of 2022, which came in the form of geopolitical instability, economic recession, and inflation, have taken a toll on the venture capital investment market, which now has to function in an extremely unpredictable and volatile environment. This comes as a heavy blow for investors and founders alike, especially after 2021, a very prolific year that saw a surge in VC deals, exits, and valuations.
Today, faced with multiple unknowns, VCs avoid making funding decisions based on promise alone, no matter how outstanding or convincing. The ability to demonstrate long-term market potential appears to be mission-critical when securing VC funding. Such potential can be proven by either the company’s financial history or the impact it is capable of creating in the long run.