Startups suffer as banks soldier on

 In Finance

Most bank stocks, including an index of regional financial institutions, rose early Tuesday as second-quarter earnings keep showing unexpected resilience. Tech giants — Apple, Amazon, Alphabet, LinkedIn parent Microsoft and others — are also holding strong, CNN notes. But, in the meantime, startups are getting hammered: Over the first six months of 2023, venture capital funding has been slashed in half, per Pitchbook, with much of it focused on AI initiatives. Funding prospects have gotten so dire that one venture firm partner tweeted he’s expecting it to turn into a “Mass Extinction Event.”


By Jake Perez, Editor at LinkedIn News

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US startups are having a bad year. Relief isn’t coming

Silicon Valley Bank

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New YorkCNN — 

US stocks are climbing and second-quarter corporate earnings are coming in strong (so far, at least). Investors on Wall Street are optimistic.

Across the country, in Silicon Valley, the situation isn’t quite as good. The tech titans like Apple, Amazon, Alphabet and Microsoft are doing just fine – but their younger startup siblings are struggling to stay afloat.

High interest rates, an uncertain economic environment and a banking crisis that hit Silicon Valley-adjacent banks hard have led to a shortage of funds for early-stage companies and a lack of opportunity for late-stage companies to cash out.

More than 400 companies haven’t been able to raise any new money since 2021, according to Pitchbook. Meanwhile, nearly 95% of all tech startups worth more than $1 billion aren’t able to generate a profit at all.

The carnage is so bad that some insiders are calling this an extinction-level event for startups.

For decades Silicon Valley has been a dominant contributor to the US economy and an integral part of the country’s culture. Could this really be the end?

Analysis by , CNN

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