The Q1 2024 NVCA-Pitchbook Venture Monitor reveals activity levels similar to those in Q1 2023. Investors have already poured $36.6 billion into 3,925 deals. Although 38% of venture capitalists withdrew from deal-making in 2023, they still control over $300 billion in uninvested funds. This situation creates an intriguing dynamic with abundant capital but few investments. 

What does this mean for startups?  

While deal counts have remained consistent, the median pre-money valuation for funded startups slightly increased in Q1 2024. This shows that quality companies are still getting funded.  What does “quality” mean in this funding environment? Venture capitalists now advise startups to prioritize profitability over the traditional growth-at-all-costs strategy.   

The “Goal Posts” Have Moved 

In 2021, the market saw a surge in investments where startups were funded at high valuations despite having relatively low key performance indicators (KPIs). The period has been followed by a correction, where the multiples for valuations have dropped. As a result, startups now face more stringent requirements to attract investors. To secure funding in this new era, companies must demonstrate stronger KPIs, showcasing solid traction, revenue growth, and sustainable business models. 

Conclusion 

This shift encourages a more disciplined approach to growth, where startups are not just chasing valuation but are building long-term value. I am optimistic about funding levels as startups and VCs respond to the correction in the market.  

Source: NVCA-Pitchbook Venture Monitor 

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What’s New

Capital-efficient startups often emerge in regions that venture capital has historically overlooked. These startups must achieve more with less to grow, making them perfectly suited for the current economic environment. We recently invested in two such companies: HLRBO in the Midwest and Mangxo in Latin America.

Great North Ventures led a $1M Seed round along with partners Comeback Capital, Gopher Angels & others into Brainerd, MN-based HLRBO. HLRBO helps landowners lease their land to hunters. Founder & CEO Heath Schubert & team have done an incredible job developing and growing HLRBO to date. Rob will be joining the board along with Jeff Peterson.

Great North Ventures has invested in Mangxo, a company set to revolutionize the way construction material suppliers extend credit terms to subcontractors in Latin America


Fund and Portfolio News

WithMe

WithMe, Inc. Appoints Jeff Lail Chief Operations Officer. With a two-decade career in the consumer services industry, Lail brings a proven track record of operational excellence to WithMe.

Nested Knowledge

Navidence and Nested Knowledge Partner to Standardize Real World Evidence Computable Operational Definitions

Yardstik

The employment screening tech startup has signed a multi-year lease for a sixth-floor office in the 100 Washington Square building.


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