The bull run is over. What it means for venture capital

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued evolution of the VC landscape.


The last few weeks formally cemented the conclusion of the thirteen year bull market we all experienced (which apexed with the most recent two-year cycle of extreme price inflation stemming from central bank policy). With rising interest rates and the signaled reduction of the central bank balance sheet from the current $9T, the market has dropped suddenly and precipitously as the S&P and the tech-heavy NASDAQ are down 18% and 30% respectively since the beginning of the year.

From Craft Ventures’ recent “operating in a downturn” presentation, the chart below illustrates how steep the drop has been for previously high-flying growth tech stocks from their 52 week highs.

­The chart below (also from the Craft presentation) also shows the anomalous high revenue multiples for growth stocks between January 2019 and December 2021. These multiples have contracted dramatically in the first half of 2022 and are back to the levels seen in 2018. High-growth companies are no longer priced at large premium revenue multiples relative to their slower growing peers, and we can see how the Fed’s aggressive infusion of liquidity into the system resulted in a highly outlier period of asset prices in technology startups.




As market sentiment has now fully rotated toward a recessionary outlook, investors have fled from growth and speculative assets. The steep drop in stock prices also relates to a return to fundamentals with higher discount rates applied toward equities (which affect cash flow negative companies more significantly).

While it’s uncertain how the markets will play out over the next 12–18 months, there appears to be elements from the late 70's/early 80’s (monetary tightening & stagflation), the late 90’s (tech overexuberance), and the global financial crisis of 2008–09 (systemic financial risk). Regardless, the decade-long era of easy capital is likely over and we all must adjust.

So, what does this mean for venture capital?

­­First, here are a few quick points of what we are seeing:

­­Our thoughts going forward:

Hope you enjoyed the summary!



VC/tech advisor, venture blogger, active angel investor, banker

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samir kaji

VC/tech advisor, venture blogger, active angel investor, banker