Venture Capital Trends to Watch in 2023

When COVID-19 induced lockdowns began to spread across the world in early 2020, venture capital partners grew worried about long term growth potential of the companies they had invested in.

Rather than sinking, the venture capital market was catapulted into a potent bull period, only showing some signs of cooling early this year. With such a pull towards venture capital investing during pandemic years, we can only imagine that 2023 will be a significant market for venture capital financing.

Now is a great time to take a quick glance at some potential trends that might play a hand in the venture capital industry for the future, so you have some idea of where to look for developing ventures.

Equity Crowdfunding

Over the last decade, the term ‘equity crowdfunding’ has been up by 657% according to ExplodingTopics, and roughly estimated to be worth USD$ 43 billion by 2028. Investing through equity crowdfunding is increasingly common for new startups, seeing as both parties in this transaction have something to gain. It’s likely that although equity crowdfunding will continue to grow strong – there will likely be better investors, and better business with real value.

Going back to the basics, building present value, and carrying out due diligence is what you want to be on the lookout for.

Get Creative

The still-tough market and macroenvironment of 2023 is a great time for companies to be more creative. Companies that can solve problems on a tight budget are going to be the ones that will move the needle, and that people will want to pay for.

Remote and Hybrid Work

Remote and hybrid working isn’t just a scar of pandemic’s past, it’s probably here to stay. The number of industries that have woken up to a just as well-oiled machine due to pandemic working arrangements only go to show the transformative potential of cross-cultural collaborations.

Zoom and other technology necessary to support international teams will continue to shift full-time employment to a more freelance model with more working autonomy. The freelancer economy is expected to shoot up in the following years, growing opportunities in the construction of tools and services to support this growing industry.

Robots

This one isn’t a surprise to most readers, becoming a question of when and not how. As the global workforce grows smaller, automation and robotics will be crucial in keeping everything running smoothly. Businesses might mitigate labour shortages and push for robotics, software, and AI and scale up to keep operations running. Look at Chat GPT! It ran for four days and already amassed over one million users – who knows, this entire listicle could be an OpenAI piece.

Climate Tech

Climate technology is expected to emerge as a relatively predictable and safe space for informed and diligent entrepreneurs, tech refugees, and investors. Climate change, one of humanities inevitable follies, will no doubt be met with a long bull run across the climate tech landscape to the relief of mother nature and smart investors.

Banking On Women and People of Colour

While Venture Capital has long been a white man’s game, funds managed by women and people of colour are starting to outperform funds led by white men across the board. Female founders and female-led funds doubling down on diversity is a predictive and culturally reflective win. More people are choosing to back women in FinTech, healthcare, future of work, and sustainability, and reaping good returns while they’re at it.