Industry executives and experts share their predictions for 2024. Read them in this 16th annual VMblog.com series exclusive.
How the VC Model Will Be Overhauled in 2024
By Chad Cardenas, CEO, The Syndicate Group
It’s no secret that the turbulent nature of 2023’s VC and investment landscape posed challenges for many startups. With less capital in circulation than ever before and landmark events such as the collapse of Silicon Valley Bank, many investors and startup founders alike found themselves between a rock and a hard place when it came to making difficult decisions about funding.
As we look ahead to 2024, there are a few major changes we can expect to see with regard to funding trends, emerging technologies, and new sources of capital that startups and investors can look forward to. Here are a few to look out for:
Investing Resets to the Basics
According to Pitchbook and the National Venture Capital Association, VC spending reached its lowest level in six years in Q3 of 2023, and it’s been trending in this direction for some time. We’re seeing record amounts of dry powder on the sidelines which we’ll see hit the market in 2024, but as this capital starts flowing again, we’re going to see a fundamental shift and a more measured approach from VCs in the investments they make, and from start-ups in the funding partners they choose. In 2024, we’re going to see a return to the basics in the form of investor and capital alignment, where the investing relationship will be a more engaging partnership and a two-way street to mutually drive growth and create value. Investors have an opportunity today to play an active role in driving the success of the start-ups they support, and we’re going to see some very positive shifts in this direction in the coming year.
Tech ‘Doubles Down’ on Channel
This year, companies on the level of Dell, Rapid7, Malwarebytes and others made bold moves to double down on the channel as a way to drive more specialized and profitable growth, and we’re going to see tremendous opportunity for channel-led growth in 2024. As technology continues to evolve and grow in complexity, the channel and trusted go-to-market partners have also evolved and become more specialized. As a result, the channel has grown to become a highly sophisticated and vibrant community of partners and resellers that will be in an incredible position to influence technology and help companies adopt innovation. Years ago, the channel was considered by many to be a low margin, low value, volume-based function that was secondary to other efforts, but this perception is long gone. We’re also going to see major strategic shifts to channel in 2024 coupled with unprecedented career opportunities for the most talented executives and visionaries in tech, as this ecosystem takes on more strategic importance to businesses. If something can go through the channel, it must go through the channel.
Focus on the Building Blocks of Tech in 2024, Look Beyond the Hype
Amid the growing hype for AI, it’s easy to overlook the technologies and innovations happening in core data analytics and processing, cyber security, cloud computing, SaaS, networking and others, which have shown amazing resilience in this economy, and incredible promise over the long term. These technologies have adapted to power new workplace norms, and continue to redefine workflows and efficiencies as businesses evolve and transform. Notably, many of these core technologies will also play a critical role creating the framework and infrastructure needed to develop and refine AI technologies to bring this technology to the next level of adoption to address specific use cases in the enterprise.
No Slowdown in Cyber, Channel to Play Increased Role
The Cyber Security industry will continue to flourish as organizations continually update and revise the infrastructure needed to manage risk and prevent attacks. As cyber continues to grow and evolve, we’re going to see a push toward exploring new avenues of growth and establishing market awareness for differentiation and where a company fits into overall cyber defenses. We’re going to see an increased reliance on the channel – and a growing realization that specialized integrators and resellers will play a pivotal role in the year ahead as companies make changes and updates to their overall cyber defenses.
Business Leaders Embrace M&A in 2024
According to EY’s latest CEO Outlook Pulse survey, nearly all (98%) of CEOs expect to actively pursue a strategic transaction in the next 12 months, with 59% of respondents looking to M&A. In 2024, we expect to see CEOs take an offensive approach when it comes to growing their businesses, looking to acquire technology and strike strategic partnerships in order to create differentiation in overcrowded markets.
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ABOUT THE AUTHOR
Chad Cardenas, CEO, The Syndicate Group
Chad Cardenas is Founder and CEO of The Syndicate Group (TSG), and Managing Director of Syndicate Venture Partners, which is pioneering a new evolution of Venture Capital investing. TSG helps startups scale faster by organizing exclusive investment access to channel partners that commit capital and also tap the broader channel ecosystem to support a company’s go-to-market strategy.
With 25 years in the enterprise technology sector, Chad maintains a wealth of experience in sales, leadership, business transformation, innovation, distribution channels and go-to-market strategies for enterprise startups. Previously, Chad co-founded Trace3, where he served as President and Chief Innovation Officer, studying macro trends in the IT industry and their effects on the VC, startup, channel, CXO and investor communities. He helped build the tech reseller/integrator to 400 people and over $500M in revenue before a private equity event in 2017.
The Syndicate Group was born out of these experiences, based on the realization that startup founders need more than just capital, but partners who really understand their business and who can align both the investor and startup interests from a sales perspective. Channel partners in the TSG network are able to stay ahead of emerging tech trends, gaining early access to great resale relationships as well as sharing in the value-growth upside of the greatest enterprise tech companies through private, pre-IPO investments. TSG’s investment scorecard includes high-fliers such as AppDynamics, CrowdStrike, Nutanix, Vast Data and Cohesity, where Chad played a key role driving an aggregate market value of over $30 billion.
