Download our Second Quarter 2022 Financing Update Here
Following a record quarter of deal volume, preliminary estimates show a decline in early-stage investing activity of 24.5%. Meanwhile, IPO fundraising has been a mere fraction of what we experienced in 2021, and stock markets, as a whole, are down this year, suffering the worst first-half of a year since 1970. This has been brought on by already-tight supply chains and the Russia-Ukraine war driving prices – and inflation – significantly higher. To combat inflation, the Fed has risen rates from near-zero in the first quarter to a range of 2.25-2.50% as of late July. More rate hikes are expected, and capital markets are showing hesitation to put money to work. Furthermore, banks are making it harder to borrow, raising lending standards and spreads on loaned funds.
Despite the gloom and doom rhetoric, investors remain flush with cash, fundraising has been particularly strong during the quarter, and there remain sectors of growth to which investors are more than happy to deploy capital.
As always, contact us if you would like to receive information about activity in your specific industry or geography, or if you would like to discuss options for your business.