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Bailey McCann, Opalesque New York:

Venture capital could be in for another slow year according to new data from PitchBook. PitchBook analysts suggest that a "market reset" is still in progress. Valuations have come down but remain high relative to historical trends. Venture debt is likely to remain expensive and relatively tight.

The biggest hurdle for venture companies could be the exit environment. "Maybe the most important for venture capital is the down shift in the P/S multiples in the public markets. These remain deflated compared with the multiples that private valuations were based on over the past few years, adding a high hurdle for companies looking to go public," analysts write.

If the IPO window opens in 2024, conditions could improve for venture funds, but that remains a big if. Many of the conditions that led to a slow down in venture including high rates, high inflation and low growth remain in place.

Investors are also growing more cautious. PitchBook notes that there is a renewed focus on portfolio construction prioritizing entry prices, sufficiently diligencing deals, and creating portfolios through a more quantitative approach than afforded by the manic market of a couple years ago. This has led to a more patient capital base, both in terms of GPs and their LPs, which continue to balance their portfolios in a risk-averse environment.

That patience is important because the rate at which capital is being distributed back to investors in ven......................

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