With half of the year now behind us, the capital markets appear to be at a crossroads. On the one hand, current economic headwinds are fierce: inflation has accelerated to 9.1%, and the Fed raised interest rates by 0.75%, with another similar raise expected again this month. With Q1 GDP growth at -1.6% and Q2 expected in two weeks, a technical recession now seems more likely than before. This is putting pressure on equity markets which finished their worst first half in over 50 years. It’s no wonder that companies are not feeling rushed to enter the public markets. This is impacting private markets, which take cues from the public markets, moving from late-stage to early-stage. Write-downs in venture capital funds are starting to occur –in Q2 we saw increased price convergence for tech companies in private and public markets– but it will take quarters (or years) to fully be represented, so expect to see more of this through at least H2 2022. Large crossover funds like Tiger Global, Coatue, and D1, have generally vacated the late-stage private markets and venture deal velocity slowed dramatically in Q2 from a hyperactive 2021.