VC dealflow goes through the roof, PE dealfow through the floor

Talking to venture investors recently every active VC I spoke to reported that they were seeing significantly more deals this year than last. Speculation is that despite the downturn, this was due to two factors:

  1. There are less funds in operating in the UK and so it is easier for active funds to be found.
  2. People have lost jobs and so are turning to entrepreneurship out of necessity.

Whatever the reasons this bodes well for the future of entrepeneurship and innovation in the UK.

Green shoots or bed of thorns?

Green shoots or bed of thorns?

Interestingly, the reverse is true for private equity where the number of deals that PE investors are assessing seriously has fallen through the floor in the first half of the year.

  1. Difficulty in agreeing acceptable valuations  to all parties in a deal (i.e. investors say management are dreaming, management say investors are too agressive).
  2. Absence of debt finance to pad out deals.
  3. No agreement about where the market is going and a fear that it could fall further.
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