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Does Recession Anxiety Cause Recessions?

Does Recession Anxiety Cause Recessions?
June 8, 2022

The Daily Stack is a daily private market insights newsletter by PrivCo, a private company intelligence platform. Read our previous insights.
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As a writer for this publication, I believe that it's important to consider seriously what issues and topics to bring to the attention of our readership. How much crypto news is too much crypto news? Does spotlighting the downfall of private companies that grew too fast affect younger companies attempting to grow? Does talking about the probability of a recession contribute to consumer sentiment that ultimately affects the recession? It turns out it's not just Ukraine, the Fed, or inflation leading us towards a likely recession. It's also all this talk about recession.

Anxiety Click-Bait
More than 80% of Americans now believe that the economy will fall into a recession in 2022. A recession is commonly defined as two consecutive quarters of negative economic growth. The first quarter (Q1) of 2022 was the first such quarter. Cardi B, a cultural icon and barometer of sociopolitical sentiments in the U.S., recently tweeted the following:


Cup Half Full or Half Empty?
If you're working for a startup company, the glory days might feel like they're behind you. Tech optimism, which boomed after a short market downturn at the start of the pandemic, isn't so high any longer. Tech stocks have taken a dive, negatively affecting investments in private companies as well. Investments in the private sector are down, and companies are bracing themselves for a recession. Elon Musk has a "super bad feeling about the economy," planning layoffs of about 10% of Tesla. Our friends at Crunchbase put together this handy infographic revealing which companies have laid off employees. 

Meanwhile, investments in the seed stage are in full swing. Just this past week, Stellate, a caching and analytics startup for API; Ivella, a debit card for couples; and Capra Biosciences, a biotech company replacing petrochemicals with biofuels, all raised seed rounds.

Seed funding in May was, in fact, the only stage that experienced growth over the prior year, proving that in times of optimism or fear, it's always a good time to have a bright idea.

Meanwhile, at Apple Stores
While Apple unveils new products and features, retail employees are organizing.
[The Verge]
SEC rewiring Wall St.
Proposed changes seek to help individual investors and public companies.

Since last week, PrivCo has added:
1,161 Companies | 213 Funding Activities | 133 M&A Deals

Funding & Deal Highlights:

AppOmni raises $70MM from Thoma Bravo

SaaS • Round C • San Francisco, CA

Perimeter 81 raises $100MM from B Capital

Cyber Security • Round C • Tel Aviv, Israel

Resilience raises $625MM from undisclosed investors

Biopharmaceuticals • Round D • La Jolla, CA

Religion of Sports raises $50MM from Shamrock

Digital Media • Round B • Santa Monica, CA

Vayyar Imaging raises $108MM from Koch

Sensors • Round E • Yehud, Israel

Insilico raises $60MM from Warburg Pincus

Drug Research • Round D • Pak Shek Kok, Hong Kong

Aledade raises $123MM from OMERS

Healthcare • Round E • Bethesda, MD

Magical raises $35MM from Coatue

Automation • Round A • San Francisco, CA

Opal raises $10MM from Greylock

Network Security • Round A • San Francisco, CA

Stellate raises $25MM from Tiger Global

API • Round A • Middletown, DE

PentaFour acquires Winterhawk

IT Consulting • Acquisition • Lakeland, FL

BD announces acquisition of Parata Systems

Automation • Acquisition • Durham, NC

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