Overcoming contradictions: The venture capital landscape in 2023

While all of the above may make many VCs work out for good, it cannot be denied that great companies are built during downturns and there is so much get excited about where we are at this moment:

Connecting innovations will lead to more renaissance moments

Cloud computing and mobile technology developed around the same time in the early 2010s, creating trillions in market value and completely changing the structure of our lives. Technological innovations are profound on their own, but when multiple innovations come together, they have the potential to create renaissance moments that truly feel magical.

Massive amounts of capital have been injected into the market over the past few years, funding multiple innovation curves that continue to expand at an exponential or near-exponential rate. Disruptors (like LLM), while enjoying their own mini hype cycle, have the potential to single-handedly radically change the return dynamics of venture-scale startups by releasing disruptive new products and changing everything from software development costs to distribution.

Starting a business has never been cheaper and easier

Over the past decade, hundreds of billions of dollars in venture capital funding have funded innovation, from building infrastructure to new platforms and point solutions, resulting in an environment where it’s easier than ever before to start a business and hire globally. Connect with this team , then leverage primitives ranging from basic AI models to compliance as a service for fintech.

The technology ecosystem is extremely resilient

It would be difficult to imagine a more disastrous set of events to hit the cryptocurrency market than the merger of Luna, ThreeArrows, SBF, Binance and the SEC. We’re at a point where NFTs will be more of a punchline than an investment, and Larry David’s FTX ads have quickly overtaken Pets.com as the most embarrassing Super Bowl moment imaginable.

And yet, 18 months into this crypto winter, Bitcoin has rebounded to a mkt cap of over $500 billion. Paypal, Fidelity, and BlackRock have made major cryptocurrency-related announcements over the past few months, and this will continue to happen Still costs 50 thousand dollars if you want to buy a bored monkey. This shows that technology-disrupted markets are larger than we ever imagined, and have much greater staying power than their internet-crash predecessors.

Consolidation will bring greater profits

The last companies standing will see higher profits due to the market dynamics I described above. The impact of combining innovations over the long term leads to the absolute best outcomes for companies and venture capital. And while innovation continues to increase, whether through true consolidation (M&A) or simply consolidating the best talent in a given market, these companies may be able to stimulate talent and capital density that was difficult to achieve in the frenzied spread of the last bull cycle .

Products conquer markets, but people create products, and with many employees facing outdated valuations and weak capital, previously untouchable talent is returning to the market and looking to avoid the mistakes of the past by joining the few companies that are Actually working.