The time to triage is over

While the fundraising market still looks bleak for startups, continuing to triage isn’t sustainable for their investors

When public market pressure started to affect venture capital in the spring of 2022, companies and VC firms weren’t prepared. Companies couldn’t justify their valuations, and investors had to step in to keep their portfolio businesses afloat.

But this focus on triaging wasn’t sustainable. VCs were spending all of their attention and capital on helping their existing portfolio companies ride out the tougher fundraising market. Funds aren’t set up to support that strategy, and venture firms’ fiduciary duties to their investors means they can’t put resources toward companies that they know won’t produce a return.

Some firms also likely spent time triaging to prop up their portfolios a bit heading into 2023, perhaps before an LP annual meeting or before launching a roadshow for a new fund.

But a year into this market slowdown, the time to triage is over.