3 questions for the startup market as we enter Q3 – TechCrunch

June is over in just a few hours, meaning that we are trotting toward the third quarter’s starting line.

Even if we forget about the speed at which the time is passing us by, the new financial reporting period offers an opportunity to pause and reflect on the key questions for next quarter. After all, we’ve seen so very much change on a quarterly basis lately that each quarter feels like a year.

TechCrunch+ is celebrating Independence Day! Get 50% off your annual subscription by clicking here. TechCrunch+ has more information if you are interested!

For example, recall Q3 2021. After a lighter second quarter, the IPO market regained its footing last July, forcing this column to group public offerings into batches to just stay on top of them. The Q3 record for total venture capital investment was also set. Robinhood was publicized. It was busy.

The last quarter of 2021 was different. Q4 last year saw both the top of many technology company valuations as well as their initial decline. It was a liminal period between the tail-end of a long-running bear market and a rearing correction. Q1 2022 continued that trend, but with more bear than bull, and the second quarter — though we have yet to collect all the data — featured a moribund IPO market, rising startup layoffs, a crypto winter and more.

What will Q3 look like? 2022Global startups: What can you do? Let’s talk through what we’re tracking, expecting and perhaps even dreading.

As we stand on Friday, the last day of a long weekend, I know you are mentally on the beach. I promise that we’ll be brief today. Let’s talk through the three questions we have for Q3:

Will valuations recover from the recession?

In the final weeks Q2, for a brief time, it seemed that software stocks were experiencing a modest recovery. The Bessemer Cloud Index’s ETF closed at 25.93 on June 16, before ticking up to close at 31.21 on June 24. This bump didn’t last.

The same companies are now down to 27.99, regaining the bulk of their gains after the little boom in software stocks. The ETF traded at 65.51 last year, so the recovery was minimal at best. It was also temporary, which is almost rude.