Use your microscope and your telescope simultaneously in times of market uncertainty! In this blog, I share insights from both Australian and US markets, and how founders can best prepare for the upcoming period.
6 Jun 2022 · 3 min read
Use your microscope and your telescope simultaneously in times of market uncertainty!
This will be the fourth 'tech cycle' for the Partner team at Tidal. We have invested during the Dotcom era, the Global Financial Crisis, and the short downturn in 2012. This cycle will no doubt be different for a variety of reasons including Covid, the great talent reshuffle, global supply chain issues, and a US inflation rate at a forty-year high.
The underlying message from the various investor notes issued to founders in the past few weeks is clear: for a time, capital has been abundant and cheap. Now it will become expensive, and harder to get.
It is important to note that for Australian start-ups looking to raise a Seed to Series A round in the current market, there is still an abundance of capital that has been committed from LPs to Venture Capital funds in the past twelve months. However, we expect that these funds will be deployed more slowly and carefully than the past three years.
This is a good thing, for founders and for investors. Founders that take the time to get to know their investors will benefit in the long term. It will also focus the funds across Australia into pragmatic and visionary founders that build products for true customer problems, in sectors ripe for disruption.
I have just returned from a two week US trip, where I visited both the East and West Coast, meeting with founders and investors. Here are my expectations and insights from the trip:
Leadership and culture is always important, but in times of market uncertainty it gets put under the microscope.
Tidal is a Seed-Stage venture fund with long investment horizons. We remain excited about the opportunity to back founders that are in the earliest stages of building their product for global markets, with a view to profitable, sustainable growth.
We can’t profess to have a crystal ball and know what the next cycle will entail, but we do know that the greatest companies in history were created during a market downturn. Capital-constrained environments can produce the most innovative and transformative companies. Our investment team is actively seeking Australia’s best founders and we have ready capital to deploy from our Seed Fund II to support your Seed Phase.
If you're a visionary founder who is ready to make waves, please reach out via our website.
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