Teknovations Investor Outlook 2: Valuations looking back and forward

Teknovations is hitting week two of their Investor Outlook series with a hard-hitting question:

Some $4T in value is locked up in venture-capital backed companies in the US alone, according to the Q3 2024 US VC Valuations report from PitchBook. This is a result of the overinflated valuations set in 2020 and 2021 that burned many companies’ willingness to exit. Is this gridlock going to continue—and for how much longer?

Read our Founder Eric Dobson’s answer below and discover other investors’ thoughts through this great series.

Eric says:

From my perspective, no, but I live in a different microcosm than the Valley or New York. The LP’s (Limited Partners) will eventually push the GP’s (General Partners) to exit these companies and recycle their cash. Lower than projected performance could have a negative impact on venture capital (VC) because many large, monied families invested heavily in VC’s during that period. This could bode well for the IPO market, giving the LP’s liquidity and allowing the companies to continue growing into their valuations. In my part of the world, valuations were high during the same period, but do not appear to be impacting exit expectations. We have several portfolio companies in a position to exit well in 2025. Valuations continued to be high despite bad conditions in 2024. However, with the election over, the pundits are saying money that went to real estate the sidelines in 2023 and 2024 should come back into the market in 2025. There is reason for optimism for the private equity market in the coming year.

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