In our Digital Asset Outlook 2022 – Private Markets 1H 2022 report, we analyse the impacts on the private market and the implications for venture capital investment and provide the following takeaways:
- Amidst the market slowdown, private valuations will be challenged, as public market multiples get compressed
- Capital will become harder to raise
a. Global venture funding is projected to decline by -19 percent in Q2 2022
b. Companies should focus on product-market fit, keep costs under control and make it through the bear market - Short-term bifurcation between tier 1 projects and the rest of the market will grow
a. Tier 1, blue-chip projects will find it easier to raise capital to minimise risk exposure
b. Additional capital available leads to consolidation opportunities - Increased risk scrutiny may cause non-core, semi-illiquid assets to be sold off
- Regulation is increasing in the crypto space: resistance is futile, better to embrace it
- Market slowdowns are an opportunity for good companies to become great by building on key advantages
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