In general, deal activity globally prospered from 2010, with a brief drop due to COVID-19, until 2022. Inflation and rising interest rates marked the end of this period, with uncertainty about what’s to come.
We’ve gathered insights from #GEC2023 speakers and industry experts to shed light on the top issues facing investors, the potential opportunities that lie ahead, and their expectations for the upcoming Global Entrepreneurship Congress (GEC) 2023.
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Shifting mindsets regarding risk
A notable shift in investor mindset has beset regional Australian investors in the last twelve months.
The genesis of the Regional Angel Investor Network lays in unlocking the investment capacity of regional communities. According to founder Sam Almaliki, navigating the investment landscape to identify high quality opportunities and deals has only become more challenging.
“What we’ve seen over the last twelve months in particular is investors being more risk-averse,” Almaliki said.
Investors now seek early-stage ventures that have already crossed the revenue threshold, possess a solid business model, and demonstrate traction. Sustainability, amid economic uncertainty, is becoming a paramount consideration.
Navigating macro challenges
According to Almaliki, there is a need to shift mindsets, diversify networks, and highlight opportunities within local backyards.
“Investors, particularly in regional areas, are shifting their mindset. The challenge for people like us, the angel network, is to put forward the right opportunities that are ready to break even – and to not breed further cynicism by putting forward businesses too early in their life cycle,” Almaliki said.
To do this also requires a cultural shift to foster innovation and risk-taking across the nation.
“How do we set the right macro and micro parameters for that? Everyone has a role to play. Government needs to make it more attractive to invest in early stage ventures. Our economy is not complex and that puts at us risk of dwindling economy and quality of living,” Almaliki said.
Investing responsibly: ESG and Impact
Delivering financial returns but also environmental and social impacts is the primary focus of Breakthrough Victoria, an independent organisation managing the Victorian Government’s $2 billion investment fund.
According to Eva Rodriguez Rodriguez, director, impact at Breakthrough Victoria, challenges include the sector-dependant nature of environmental, social and governance (ESG) issues, and with confusion and lack of clarity around ESG and impact terminology.
“Our approach to responsible investment involves considering ESG issues when making investment decisions alongside the impact that the investment creates for Victoria and its people. Doing this for the often very early-stage, innovative and deep-tech-focused organisations we invest in can be challenging as many material ESG issues are sector-dependant and companies may have not yet achieved product-market-fit,” Rodriguez said.
“This is why our role in influencing and creating awareness of ESG issues is critical as an investor, and we are working collaboratively with a range of national investors to help facilitate this process for companies, to understand how we can actively support them,” she said.
Opportunities for entrepreneurs and investors
The venture market remains volatile throughout the world, but especially in emerging markets that are facing headwinds due to inflation, currency and energy crises.
According to Nirjhor Rahman, CEO of Bangladesh Angels Network, many companies who raised funds in 2020-2022 are now needing to think about their next rounds. As globally, pressure is also coming from the reallocation of capital to more safer assets.
These conditions give rise to unique opportunities for investors and organisations ready to capitalise on current conditions.
“If you’re making investments now, you’re getting more reasonable valuations compared to the last few years. Companies that survive the next 18 months can consolidate their market positioning as rivals retrench,” Rahman said.
“As Big Tech layoffs continue, there’s also opportunity for startups to recruit and hire talent they might have struggled to get before,” he said.
Global gathering of angels, networks and VCs
Pauly Suchy, director for Startup Programs at the Global Entrepreneurship Network, oversees investor-specific programming for #GEC2023. According to his experiences at previous events, each GEC is a unique and diverse global gathering with active opportunities to understand trends, explore connections and discover new prospects.
“Top issues facing investors are finding promising deal flow opportunities; building and fostering relationships with early-stage founders who may have the DNA, but not yet the support, to lead a successful startup; and learning to spot when, where and how to contribute and support early founders,” Suchy said.
“This is a huge opportunity to discover emerging trends and industry opportunities, meet experts and peers investing in promising new markets around the world, and learn to navigate major challenges like Silicon Valley Bank, inflationary elements and illiquid markets, currency fluctuations and geopolitical conflict.”
The investment landscape is marked by challenges and opportunities that demand adaptability, innovation, and collaboration. What will you take home from GEC 2023 that will serve the future, and transform your world?
Register now for #GEC2023 and learn from investment experts around the world. From invite-only summits to practical workshops, view the investor-specific program here.