The next few years may lead to around $500 billion in capital loss, and it may lead to the destruction of trillions of dollars in 2018 and beyond. As a result of recent layoffs at corporations like Metta, many talented people may seek new opportunities at startups or smaller companies.
The risks of inflation are slightly higher than before, but the risks of a recession are slightly lower due to a better job report. There is speculation that labor costs will go back up, causing the economy to overheat, and the Fed will have to increase rates.
Founders should reevaluate their headcount plans by going back to their original business plan from 2019 before the pandemic, and consider whether the current headcount is sustainable.
The market has been flowing red for months and the balance of risk is making a recession possible. The multi-trillion dollar mutual fund complex has been a net seller and the pricing was based on enthusiastic retail investors rather than fundamentals.
In a crisis, companies can use the opportunity to become more efficient and profitable by cutting costs, sharpening their pencils, and focusing on their core product. This strategy has been effectively implemented by Airbnb and Uber during the pandemic, leading to successful outcomes.
The venture markets have a six to twelve-month lag just in terms of reset, while experts predict a possibility of a normal market environment in six months following the washout of problems.