3 Steps to Building a Tech Startup Without Any Outside Money
His mentorship taught me how to run a profitable business from the start. Taking on outside capital has its merits. It can open doors and ...
valuations are lower
Taking on outside capital has its merits. It can open doors and accelerate your company's operations and growth, but it also comes with setbacks. Founders often have less autonomy and in a down economy, <anchor>valuations are lower</anchor>, investors are more discerning and terms are less favorable.
Startups, Don’t Pin Your Hopes on VC Dry Powder
Startups, Don’t Pin Your Hopes on VC Dry Powder

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[Venture capital](/topic/subject/venture-capital)

# Startups, Don’t Pin Your Hopes on VC Dry Powder

Even with $290 billion in committed capital, venture capitalists may slow their pace of investing — and focus on the companies they’ve already backed.


by

- [Micah Rosenbloom](/search?term=micah%20rosenbloom)

by

- [Micah Rosenbloom](/search?term=micah%20rosenbloom)

October 18, 2022

![](/resources/images/article_assets/2022/10/Oct22_18_4640636.jpg)

Juan Moyano/Stocksy

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Summary.
The startup world is currently debating when venture capital investing will return to its pre-2022 heights. The bullish case is that VCs have lots of “dry powder” — capital that’s already been committed. That money will get invested one way or another, the thinking goes. But that’s not the whole story. In fact, VCs may slow their pace of investing and may focus on helping the companies they’ve already backed, making fundraising harder for newer startups. For that reason, startups should reconsider their fundraising strategy and some should consider aiming for profitability sooner than they’d planned.

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Venture funding for startups suffered a [50% year-over-year drop](https://news.crunchbase.com/venture/global-vc-funding-pullback-q3-2022-monthly-recap/) in the 3rd quarter of 2022. While most participants in the startup ecosystem were expecting a downturn, this dramatic pullback in deployment is sure to send chills down the spine of many founders and funders.

Read more on [**Venture capital**](/topic/subject/venture-capital?ab=articlepage-topic)
or related topic
[**Economic cycles and trends**](/topic/subject/economic-cycles-and-trends?ab=articlepage-topic)

- MR


[Micah Rosenbloom](/search?term=micah%20rosenbloom&search_type=search-all) is a general partner at Founder Collective, a seed stage venture capital fund.



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Read more on [**Venture capital**](/topic/subject/venture-capital?ab=articlepage-topic)
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[**Economic cycles and trends**](/topic/subject/economic-cycles-and-trends?ab=articlepage-topic)

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