Startup leaders weigh in on an economic environment filled with mixed signals and what’s ahead for them in 2024, according to the latest U.S. Business Leaders Outlook report from JP Morgan Chase. Scott A. Scanlon, CEO of Hunt Scanlon Ventures, takes a closer look.
According to a just-released Business Leaders Outlook report from JP Morgan Chase, innovation economy leaders are still grappling with the fallout from three years of economic turbulence.
But three in four leaders at early-stage startups, venture-backed and high growth companies are confident about their company’s performance heading into 2024.
U.S. startup leaders, according to the report, differ in their views on the outlook for the national economy this year. Roughly four in 10 startup executives surveyed said they are optimistic about the national economy, while 30% said they’re pessimistic and 27% hold a neutral view.
Perspectives were more upbeat as the survey polled leaders’ outlooks closer to home. Half of startup respondents, according to JP Morgan Chase, are optimistic about their local and regional economies, and the majority (74%) are optimistic about their company’s performance.
Started in 2011, the annual and mid-year Business Leaders Outlook report provides snapshots of the challenges and opportunities facing executives of midsize U.S. companies. This year, 155 respondents completed the survey.
Top Challenges
Innovation economy leaders’ top challenges stand out from middle market executives, said the report. Roughly half of respondents (52%) cited the availability of capital or credit as a top concern, compared to just 13% of U.S. midsize businesses. And 48% cited revenue and sales growth as a key concern, compared to 39% of the broader middle market.
“A commanding 98% of startups said they expect revenue and sales to hold steady or increase in 2024, and 95% expect steady or increasing profits.”
Interestingly, a commanding 98% of startups said they expect revenue and sales to hold steady or increase in 2024, and 95% expect steady or increasing profits.
Given the difficult recent past, business leaders’ responses suggest they are prepared for whatever the market may bring in 2024. While 67% say declining tech valuations have had a negative impact on their ability to raise capital, 54% are confident they have enough capital to hold off raising additional funds this year.
Light Impact on Hiring
“What I found most interesting from this latest research is that even though tech valuations have softened, most startup leaders indicated the trend is not a factor driving hiring, growth, innovation or liquidity,” said Scott A. Scanlon, CEO of Hunt Scanlon Ventures based in Greenwich, Conn. According to JP Morgan, he noted, though access to capital is clearly impacted by valuation, it seems leaders have prepared for that inevitability.
A full 58% of respondents said they see no impact from declining tech valuations on hiring and talent management; in fact, 23% saw a positive impact while just 19% said they expected to see a negative impact.
“Startup leaders are taking a measured view on the year ahead as they navigate historical shifts in capital markets and rising interest rates,” concluded the JP Mogan Chase report. Indeed, half of startups said that they have raised enough capital for the year, and only 3% plan to raise debt.
Article By
Scott A. Scanlon
Scott A. Scanlon is Co-CEO of Hunt Scanlon Ventures, which was formed to assist human capital firms realize their full investment potential. Scott has spent the last three years building the firm’s M&A advisory unit, which now offers a full range of critical solutions to guide founders and their management teams to successful exits. Connect with Scott.
