[Column] Chad Cardenas: Predictions for investments and VC funding in 2024

Chad Cardenas, Founder and CEO of The Syndicate Group, a venture firm leveraging the power of the channel ecosystem to accelerate startup growth, has shared some predictions for investments and VC funding in 2024.

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 startups 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 startups 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 important 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 against 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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