July 26, 2022

Capital Provider Market Sentiment Survey

In June, Bigfoot Capital surveyed our capital provider network of equity investors and lenders to assess their sentiment and activity.

We released the results a couple of weeks ago (presentation link below). Here are the high-level takeaways:

1) Sentiment (next 12 months) – Negative/Neutral/Positive

All: 90% surveyed believe a recession is coming in the next 12 months. Equity investors are breathing a sigh of relief with valuation resets and both equity and lenders are focused on quality over growth

Equity: Seed/A investors report positive sentiment at 55% of respondents. Seed only and A/B/Growth investors are largely neutral at ~65% of respondents.

Debt: Lenders are more negative than equity investors with 45% of no.n-bank lenders and 38% of bank lenders reporting a negative outlook

2) Strategy Shifts

Seed Only: only 10% indicated any shift in strategy, the rest are staying their course with all maintaining a long-term mindset.

Seed/A, A/B/Growth, Non-bank lenders: More selective, disciplined and sensitive (to burn). Bar has been raised, rewards (valuation/terms) still their for super healthy companies.

Banks: Some cutting back on activity and tightening on structure

3) Investing Activity (YTD and next 12 months)

See charts on slides 31 and 32.

Recession be damned! 6 in 10 equity investors and non-bank lenders expect to be more active over the next 12 months. That’s 4 in 10 for banks, who largely expect to maintain the same level of activity.

Download Here

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