#167 How This Ends (Fred Wilson & More)
👋 Hi, I’m Doug! Welcome to @TheFundCFO crew! Every Tuesday/[Thursday], we publish VC/CFO insights that matter - highlights from notable VC GPs, LPs, and CFOs/finance pros. Check out our VC Fund Playbooks, Models, Budgets, & Compliance Checklists @ Streamlined.Fund! Love what we’re doing? Consider upgrading to paid for deeper dives on Thursdays (most paid subscribers expense these insights!).
“Light tomorrow with today.” -Elizabeth Barrett Browning
Picture of the Day: Nasdaq up 22%, S&P up 18% YTD (as of 7/17/24)
The Latest & Greatest Fund CFO Posts
#163 Top 7 VC CFO Posts of H1 2024 (All In One Place)!
How This Ends (Fred Wilson & More) - Part Four?
One year ago, Fred Wilson released How This Ends (Part Three) where he shared the following: “The venture capital sector has been in a sustained downturn for almost eighteen months. How does this downturn end? Well, it may have already ended, but let’s see about that. We will know for sure in a few quarters. The NASDAQ peaked at roughly 16,000 in November 2021. By June 2022, it was down 33%. It stayed down for all of 2022 and ended the year at roughly 10,500. But this year the NASDAQ is up almost 40%.”
That was then. Today the NASDAQ is just under 18,000, or up almost another 30% (22% up this year alone).
What’s driving this? Inflation and interest rates continue to be big parts of the puzzle and there’s good news - both seem to be coming down. On inflation: “Inflation falls 0.1% in June from prior month, helping case for lower rates." On interest rates: “Powell indicates Fed won’t wait until inflation is down to 2% before cutting rates.”
So how does this all end and what does this mean for venture capital? Since we’re still waiting on Fred’s latest 2024 take on this via Paragraph (go subscribe!), we’re going to take a shot at unpacking this here.
How This Ends and What it Means for VC
As we move into the second half of 2024, capital markets appear to have found a solid footing and continue to move higher. Inflation is coming down, the Fed seems to be on the path to cutting rates, and it seems likely that they will pull off the “soft landing” for the US economy. We were reminded in the past few weeks that the 2024 US presidential election remains a wild card in the mix.
Investors (LPs) in the venture capital and private capital asset classes have seen their broader portfolios go up (driven by public markets). This makes them happy and in theory gives them more money to allocate to PE/VC. However, talking to these investors, many remain cautious…
Keep reading with a 7-day free trial
Subscribe to @TheFundCFO Newsletter to keep reading this post and get 7 days of free access to the full post archives.