Startups Feel the Crunch as Venture Capital Dries Up

Numerous tech startups are shutting down or drastically changing their business strategies due to limited and costly capital. A venture boom in 2021, fueled by cheap cash, has now turned into a potential bust, with venture-backed startups running out of money and more companies folding than expected. Some believe that the 2021 venture-capital boom and pandemic-era government funding have prolonged the survival of companies that should have closed earlier. With dwindling funding, startup failures are on the rise. Investors and founders are now hoping for a market rebound that will open up public markets once again. Despite the decline in the venture market, tech stocks are strengthening with the Nasdaq Composite Index increasing by over 26% in 2023.