This is part investor research focused on Australia and New Zealand. The following responses come from Australian investors. You can find New Zealand’s answers here and the full article here.
We spoke with:
Answers have been edited for length and clarity.
Gabrielle Munzer, Associate, Main Sequence
Inflation is slowing. Does the prospect of fewer interest rate hikes going forward change venture capital investment and fundraising strategies in the coming quarters?
Slower inflation and fewer rate hikes present a more positive outlook for both public and private equity markets, although it is important to recognize that this may not be an immediate recovery but a gradual improvement. In the coming quarters, we expect late-stage equity valuations to begin to improve, accompanied by the opening and increased receptivity of the IPO markets.
We are very excited about the increased exit opportunities for maturing companies within the portfolio consistent with our long-term approach.
Both the number and value of business deals fell in the third quarter. Do you expect the same trend to continue in Q4 2023 and 2024?
Probably so, as the end of the year and the start of the new year traditionally bring a slowdown in venture capital activity. But in startup land, constraints often force founders to rethink their approach and push to new heights of creativity. What we’re seeing as a result is startups adapting by expanding their runways in a variety of ways, including streamlining their resources, entering into strategic joint ventures with key customers, adjusting business models to achieve more revenue upfront, the development of subsidiaries and the use of alternative funds. -increasing options such as convertible bonds and corporate debt.
