On July 18th we had the pleasure of hosting Dennis Kirpensteijn, COO of ZOLLHOF, for a virtual bgreen leaders eXchange on Empower the Future: Invest in Tomorrow’s Impactful Start-ups Today! With his extensive experience in start-up investment and entrepreneurship, Dennis provided a powerful overview of the current venture capital dynamics. Here are the key takeaways:

1. Venture capitalists and business angels are more cautious at the moment due to the current situations. However, this is the wrong mindset to have.

“Buy when there’s blood in the streets and sell when there’s euphoria.” – Warren Buffett

2. Funding rounds are decreasing, early-stage valuations are going down, late-stage valuations are decreasing heavily, influx of bridge rounds, and less exits, hence no money flowing back to investors… yet there is lots of “dry powder” (venture capitalists with money but being cautious) present.

3. The bigger the economic insecurity, the better the founders are on average because they are more committed to solving a problem and willing to take the risk. Additionally, the lack of capital in the market drives founders and start-ups to be more cash efficient.

4. Business angels are one of the most important sources of funding for early-stage companies, enabling them to get to the next round and fulfill their dreams; Helping start-ups through the rough waters not just with money but as a sparring partner and mentors.

5. Lower valuations, faster asset appreciation, and efficient growth are reasons why you should invest now. It will take 5-10 years to see a return on an investment in a start-up. By investing today when the market rate is lower, the mood on the markets will be more normalized by then.

Did you know…

The 2008/2009 financial crisis introduced a number of successful companies including Airbnb, WhatsApp, Instagram, Slack, Uber, Pinterest, and Square.