2022 was more of a body blow than a knockout punch to #Founders and #VCs.

Most Founders will stagger to their feet and strategize with their Investors.

So while the next 12 months will feel like 12 more rounds, it’s a fight that can be won.

8 predictions for 2023: 🧵👇
2023 Prediction #1: Many important macros will stabilize

“You have to learn the rules of the game and then you have to play better than anyone else.” – Albert Einstein

Uncertainty freezes markets. Certainty liberates them.
It’s highly likely that we’ll see the end to rate increases by mid-2023.

It’s highly likely that the drivers of inflation will flatten and/or start to improve by mid-2023.

It’s highly likely that housing prices will settle into a new norm by mid-2023.
Right now consumers’ perceptions of inflation exceed the rate of inflation itself and businesses don’t know how to respond.

But once the new rules of the game are understood, businesses can adjust their models and consumers can re-optimize their lives accordingly.
2023 Prediction #2: Staging ambition will become the new norm

“Being realistic encompasses the negative, but it by no means excludes the positive.” – T.K. Coleman

The fundamentals of how to fund, build and scale startups efficiently will be relearned in 2023.
Great businesses need to be built on top of foundationally good businesses.

Going directly from “zero” to “great” is a fantasy standard that 2023 is going to stomp out of the belief system of Founders and Investors.

Discipline will be rewarded in this new world.
2023 Prediction #3: More regulation is coming

“Only two things in life are infinite – the universe and human stupidity – and I’m not certain about the former.” – Albert Einstein

Regulation ALWAYS follows complaints and damages, both of which are in high supply right now.
Regulation is the imposition of rules and penalties that are intended to modify the behavior of individuals and firms in the private sector.

If people can’t protect themselves then Regulators will. And with the recent meltdowns in crypto, it’s an obvious place for them to start.
One shouldn’t underestimate the power and momentum good regulation can unlock.

Unfortunately the opposite is also true.

One shouldn’t underestimate the friction that bad regulation can impose.

Prediction: Incremental Regulation in 2023 will be net positive.
2023 Prediction #4: Investors will be allergic to bargains

“Don’t bargain shop for parachutes or plastic surgery” - Anon

Investors will be very open to investing in great startups but price won’t turn a “no” into a “yes” for an average startup.
“Team and TAM” investing will retreat to the pre-seed stage.

Positive progress will govern the availability of downstream capital.

Darwin has returned from vacation and he only likes the good things in life.

And if Darwin doesn’t like you extinction might be around the corner.
The startup ecosystem has years of catch-up work to do flushing out marginal business models and teams that were propped up by undisciplined Investors.

2023 will without a doubt be the year that capital dries up for these businesses and natural selection starts working again.
2023 Prediction #5: Buyers aren’t interested in liabilities

“An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket.” – Robert Kiyosaki

Buyers are going to value the results of today more than the promise of tomorrow.
2023 is going to be a tough year for startups that can’t attract capital if they’re burning cash.

Sales processes will rarely result in a great outcome. Most will end up being fire sales, acqui-hires or no-bids.

It’s a tall order for tech and team to justify owning a liability.
2023 Prediction #6: Layoffs will fuel innovation

“When you have a large amount of the workforce being laid off, some of them have no other choice but to go out there and invent something.” – Daymond John

Startups that need to cut are cutting now. Cutting later is too late.
For most startups the downstream impact of layoffs will be positive.

They’ll be leaner, move faster and make better choices.

Money will last longer. The learnings per dollar deployed will be greater. The companies being built will just be better.
Layoffs typically come from the “experienced middle ranks” because “doers” are necessary and Executives rarely fire themselves.

This could kick start a new cycle of innovation because many in the “experienced middle ranks” will use this opportunity to become Founders themselves.
2023 Prediction #7: What’s old will be new and what’s tried will be true

“You may have lost your way more than a little bit, but I believe you can find your way back. That’s the trick. Finding your way back.” – Elanor Brown

2023 will be a grand reset to known norms.
Valuation multiples will collapse to reasonable levels.

Blitzscaling will be replaced by smart scaling.

Round sizes will shrink as startups re-learn the power of capital efficiency.

Startups will have to materially de-risk between rounds to attract capital.
Fundraises will no longer feel like shotgun weddings and instead will return to mutual dating exercises.

LPs will have less capital to allocate to the VC asset class which will hurt new managers and underperforming established funds.
Liquidity for employees and early investors will be hard to come by until a startup is fully de-risked and on a glide path to profitability.

Controls, governance and reporting will once again become important to Investors and in many cases will be non-negotiable.
2023 Prediction #8: Geographic boundaries have been smashed for good

“If you don’t get out of the box you’ve been raised in, you won’t understand how much bigger the world is.” – Angelina Jolie

Talent, capital and ideas are the fuel of startups and all can be sourced globally.
Until recently, most VC backed startups were HQed in specific cities that were known “talent hubs”.

And until recently, most Investors preferred investing in startups they could touch regularly which meant they also HQed themselves around these “talent hubs”.
The combination meant that a handful of cities in a few countries dominated the rest of the world.

But the past few years untethered the sourcing and management of talent from geographic limitations.

Borderless Ideas + Borderless Talent = Global Opportunities.
TL;DR: While it’s true that the the current environment has turned everything upside down, it’s also true that when we get to the other side it will almost certainly be better than the side we've been on for the past few years.

I for one am looking forward to it!
And if you’d care to like and share (🙏), here’s a link to the first Tweet in the thread:

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with fintechjunkie.eth

fintechjunkie.eth Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @fintechjunkie

Nov 22
Did you know that it’s now possible to buy an IRL house on @opensea?

It may sound like science fiction but it’s real.

Read on if you’re curious how it works and why this is a giant leap forward in the use of #web3 technology!
On October 14, 2022, an on-chain transaction was completed for the purchase of a house on 149 Cottage Lake Way in Columbia, SC. The purchase price was 175,000 USDC and the house is now listed on @opensea (with traits!) for everyone to see.
The transaction was facilitated by @Roofstock, a company that specializes in buying, selling and managing single-family rental (SFR) properties.

While @Roofstock is a known player in the SFR space ($5B+ in transactions), this transaction was their first using web3 technology.
Read 27 tweets
Nov 9
Another day another meltdown in the crypto space. Smarter minds than mine are unpacking the details of what’s happened and what comes next.

But I thought it would be worth explaining “the issue behind the issue” and when your money might not be safe!!!! 🧵👇
To understand the meltdowns, you have to start with the functions of the entities that you entrust your money with.

Some entities focus on delivering a single product or service while other entities have a suite of products and services that they manage.
A full-service Financial Institution (FI) manages hundreds of products that can be bucketed into a few major categories:

👉Storage of money (deposits)
👉Movement of money (payments)
👉Lending of money (lending)
👉Asset management (investing)
👉Transference of risk (insurance)
Read 20 tweets
Nov 5
Founders are busy re-structuring their operating plans to reduce burn.

A reduction in burn almost always slows growth which #VCs will interpret as a negative signal.

The result is confusion and loads of bad advice.

Is this a solvable problem? 🧵👇
Initially, a startup is merely an idea and the goal of a Founder is to learn every day and adjust their startup’s operating plan based on these learnings.

If they’re right they’ll build something special.

If they’re wrong they’ll lose their Investors’ money.
A big piece of the Founder’s job is to answer the following questions:

👉How much can I learn for how much money?
👉How quickly can I learn what I need to learn?
👉What is the cost to scale into independence?
👉How high is up?

The answers to these questions matter a lot.
Read 29 tweets
Oct 26
The media is having a field day reporting on falling real estate prices and the headlines make it seem like Armageddon has arrived.

This view is misleading because it anchors to all-time-highs which is nonsense for any asset class!

Here’s a data-rich counter-narrative: 🧵👇
Millions of homes are sold every year.

Source: Statista data from January 2022. Image
Freddie Mac’s House Price Index shows that home prices have appreciated significantly over the past 10 years.

Source: Statista data. Image
Read 13 tweets
Oct 25
The #1 responsibility of a Founder is to make sure their company doesn’t run out of cash, but raising capital in today’s market is TOUGH.

Here’s a quick framework for determining how challenging it will be for a #startup to raise new #VC capital.

Is your #startup ready? 🧵👇
The first truism that should be internalized is that the playbook for raising capital in 2020 and 2021 won’t work today.

The past few years were anomalies and everyone’s expectations should be reset.

Raising multiple rounds of capital based on team and TAM won’t work anymore.
While there are many VCs, most startups will have a tough time raising capital in this market if they don’t show well on 5 major dimensions:

👉Very Few Leaps of Faith
👉Material POSITIVE Progress
👉Insider Support
👉Capital Efficiency
👉Realistic Expectations
Read 21 tweets
Oct 21
Gigantic businesses can be created when an amazing Founding team focuses its attention on a rock-solid business idea that’s perfectly aligned with an emerging mega trend.

This is what #Founders and #VCs live for.

Curious what this looks like for a 15-month-old company?
The Problem Statement

The pandemic has taught the world that it’s possible to effectively work remotely. One result of this discovery is that many knowledge workers are interested in occasionally working from “destination locations” that allow them to mix work with fun.
But there hasn’t been a great way to find rentals in vacation destinations where being able to work remotely is a requirement.

On sites like Airbnb, what you see and what you get varies wildly. Reliable high-speed internet and dedicated work zones are rarely “as advertised.”
Read 13 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!


0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy


3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!