Economic Trends Speaker

Venture funding does not move in a straight line. It moves in cycles, and most founders meet one phase of one cycle across the whole life of their company, which is why a market that felt wide open last year can feel sealed shut this year for reasons that have nothing to do with the business.

So the talk opens on one question. Which cycle are you in?

What the talk covers

Three cycles run underneath venture funding, and they do not move together.

The economic cycle sets valuations. Expansions inflate them and downturns reset them, and the questions worth asking change at every stage: how the sector behaves at this point, what the risk and return tradeoff looks like right now rather than in the deck you built last spring, and whether the company survives a downturn that arrives mid-raise. I work through those in the impact of economic cycles on venture funding.

The credit cycle sets liquidity, and it arrives late. Tightening starts with limited partners, moves through the funds, and only then reaches founders as a round that suddenly takes twice as long to close. That delay is why it so often gets read as a company problem when it is a market one. How credit tightening ripples from LPs down to startups traces the path.

The technology cycle sets timing, through four phases: innovation, syndication, diffusion, decline. Mistime which phase a category sits in and the returns go with it, however good the company underneath happens to be.

Underneath all three sits the swing between greed and fear that market cyclicality describes. Same company, same metrics, different answer depending on when you walk in the door. Reading that swing is most of what separates a venture investor managing risk from one riding sentiment, and it is also what makes a founder’s timing look like judgment in hindsight rather than luck. The four phases and what mistiming them costs is where I lay the technology side of it out in full, including why the diffusion phase is the one that fools the most people.

Who it is for, and what the room leaves with

Founders deciding when to raise and how much runway to hold before they do. Investors deciding what to underwrite at this point in the cycle rather than the last one. Corporate teams setting a thesis for the next few years.

They leave able to place themselves inside each of the three cycles, holding the questions worth asking before a fundraise rather than during the post-mortem. Other talks are listed on the speaking page.