VC-backed startups are in a ‘difficult position’ in 2023: Analyst

Startup funding has declined over half since last year to $10 billion. Kyle Stanford, Lead VC Analyst at Pitchbook, discusses with Yahoo Finance Live the conditions for companies seeking venture funding.

Stanford says that there are currently 51,000 private VC backed companies and also… about half the amount of capital. These companies are struggling to find a solution to their struggle to raise capital.

Stanford looks at the closing rates of U.S. VC transactions over the past few years. It also examines which industries have seen the most consistent infusion of capital.

Stanford explains: “We haven’t really seen a rise in the rate of closings in the data. We have seen an increased in down rounds.” He adds that if nothing changes on the exit market, then we can expect closures to occur, most likely now or towards the end of the year. We do expect a lot of kind of startup-to-startup M&A to kind of consolidate in some of these markets.”

Stanford commented on Kim Kardashian’s shapewear label Skims’s success and its ability continue to attract funding for direct-to-consumer sales.