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Venturing Ahead: 2021 Outlook

The views portrayed in Venturing Ahead: 2021 Outlook are subject to change at any time based upon market or other conditions and are current as of March 21, 2021. While all material is deemed to be reliable, accuracy and completeness cannot be guaranteed.

“If you think big, then it's going to be big.” - Emeril Lagasse

Following a tumultuous year and several macro headwinds, the Venture Capital industry is undergoing a period of transformation and innovation. Yes, at AFZA Capital, we believe that these changes have been accelerated by the coronavirus pandemic, but the reality is people always find new ways to disrupt. During our funds launch, we continuously heard whispers and feedback about a concerted effort to look beyond traditional Venture Capital. The market developed new ways to capitalize startups through SPACS, crowdfunding, and nontraditional methods. Interesting enough, nontraditional investors have also evolved their strategies in the Venture Capital sector and now represent a main driver in the market. These are broadly encouraging changes with Venture Capital and are necessary to foster continued expansion in 2021. Several main points that we will predict in our 2021 Outlook

  • We will see a successful vaccine rollout and we will trend back to normal by the end of year

  • We will see positive capital flow back into the market as funds recycle profits and liquidity from the 2020 IPO market

  • We will see 2021 reach near-record levels as it relates to companies being funded

  • The number of SPAC IPOs will decline YoY in 2021, and fewer than 30% of 2020 SPACs will close an acquisition.

  • Proportion of late-stage VC deal value relative to IPO proceeds will continue to compress in 2021.

  • Despite Silicon Valley’s continued dominance in VC and rising yearly deal counts, its proportion of total VC deal count in the US has softened, falling nearly each year since 2006.

As we explore ways to increase our 2021 deal activity, we look forward to picking back where we left off in March of 2020. We appreciate the markets patience and support.

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