In the second half of 2022, there was a strange puzzle to reconcile in global Venture Capital ecosystems. On one hand, VCs and founders widely acknowledged a degrading fundraising environment in which companies needed to significantly downgrade their fundraising expectations. On the other hand, it was widely acknowledged that there was more VC dry powder than ever before. Are these two not directly contradictory? Was one side wrong?

We learned that these can both be true. Indeed there is more VC funding available than ever, but the demand for that capital has grown even more rapidly. That is, the supply of capital grew, but demand exploded. This led us to create a gauge that measures the relative availability of capital, which we call the Weather Report. This gauge measures