This year has been a whirlwind for investors and founders alike. The venture capital boom of 2021 may have seemed like it was slowing down, but the startup and VC worlds have undergone a significant shift in just a short time. A new dynamic has emerged where "growth at all costs" has given way to a more measured and careful approach to business and investing.
Shift towards Safer Trends
For 2023, investors are focusing on trends that are relatively safer and more likely to bear fruit. Two key areas of focus have emerged:
Generative Artificial Intelligence
Xfund’s Vice President, Jadyn Bryden, and Lightship Capital’s Principal, Alexis Alston, have both highlighted the potential of generative AI in scaling previously human-led areas of business.
- "I’m looking forward to seeing how AI can contribute to scaling previously human-led areas of business, such as sales, social media, marketing, and content development," Alston said.
- Bryden noted that more diverse investors each year will lead to more venture dollars going towards Black founders. "It is a slow progression, but having Black decision-makers at the table can be a great way to make sure that Black founders have representation across the board."
Vertical Software
Richard Kerby, a General Partner at Equal Ventures, believes that vertical software is a good subsector to watch. He explained that this type of software provides workflow improvements to categories that enable companies to monetize via various financial services.
- "Some of the sectors that we will be exploring include supply chain, logistics, insurance, construction, and e-commerce enablement," Kerby said.
- Bryden emphasized the importance of having Black decision-makers at the table to ensure representation for Black founders. Alston shared concerns about the potential drop in numbers for under-represented founders.
Funding for Under-Represented Founders
The investors mostly agreed that not much was likely to change when it comes to funding for under-represented founders. However, there are some hopeful signs:
- "There are increasingly more diverse investors each year," Bryden said.
- Alston expressed concern about the potential drop in numbers.
What Investors Expect in 2023
Read the full survey to find out what these investors expect in 2023, which laws and policies they’re keeping an eye on, and the best way to pitch them.