1、February 2023A Review of the Health and Productivity of the Innovation Economy We continue to believe in the innovation economy in the face of adversity.Challenging market conditions are periods for building,particularly for startups.Today,founders have time to slow down,focus on product market fit,

2、and develop long-lasting innovations while drawing on a greater availability of talent.Further,after corrections,there tends to be a long period of economic expansion.In the three years during and directly after the Global Financial Crisis(GFC),127 unicorns were founded a 76%increase over the prior

3、three years.Today,US venture capitalists(VCs)hold a record$300B in dry powder waiting to be deployed,but investment has slowed.Following recessions,the weighted average age of dry powder has historically increased due to decreased investment and fundraising.Today,the weighted average age of dry powd

4、er is nearly 50%lower than its peak following the GFC,indicating that if the economy ends up in a so-called“hard landing,”we can expect todays dry powder to sit on the shelf a little longer.That said,investors are on the clock to deploy capital and generate a return for limited partners(LPs)and fina

5、ncial incentives are aligned for them to deploy that capital.As a result of slowing investment,capital is scarce for founders.Tightening venture capital(VC)investment and falling public markets have led to the most significant private market valuation correction in the last 20 years;the median late-

6、stage tech pre-money valuation fell 56%in 2022.Furthermore,33%of late-stage tech companies have yet to be repriced since 2021,indicating there may be challenging fundraises on the horizon for some companies.Additionally,the slower fundraising environment has led nearly 40%of US VC-backed tech compan