--- title: "Top 10 Insights from the 2022 Startup Sentiment Survey" description: "Explore key findings from 500 startup founders: 45% expect slower growth, 89% predict lower valuations, and SaaS shows resilience in 2022 market conditions." categories: ["office hours","data analysis","fundraising","startups"] keywords: ["Theory Ventures","Tomasz Tunguz","startup sentiment survey","venture capital","SaaS market trends","fundraising insights","annual recurring revenue","startup growth expectations","market conditions analysis"] ai_summary: "Key insights from the 2022 Startup Sentiment Survey reveal founders' cautious outlook on growth and fundraising amidst market fluctuations." date: 2022-06-06 lastmod: 2026-07-23 canonical_url: https://www.tomtunguz.com/2022-market-survey-results/ author: "Tomasz Tunguz" --- {{< youtube UuUO0R5CdPY >}} Over the past week, I've analyzed the nearly 500 responses from founders who responded to the [2022 Market Conditions Survey](https://tomtunguz.com/2022-startup-market-conditions-survey/). Thank you to all who participated and those who attended last week's Office Hours to review them. [The survey results review the trends](https://docs.google.com/presentation/d/e/2PACX-1vSuXifnoFYyLFutdJ-o_s9LdCAQtMP1A-10rwhvsq3wvCKk6dr4ntUVoVybphWboO83_JN4tXavSD4c/pub?start=false&loop=false&delayms=3000 ) in the public market, in founders' minds, and the private market. **Top 10 Insights from the 2022 Startup Sentiment Survey** 1. The typical founder feels 6.0 on a 10.0 scale, just slightly better than neutral about the market. During the live Office Hours, the audience was more negative, recording an average of 4.0. 2. Software & Infrastructure companies are more optimistic than web3 and consumer founders, who average 4.8. Perhaps, the strength of public market SaaS & IaaS companies supports this optimistic slant. 3. 30% of respondents have observed longer sales cycles. Companies selling to mid-market and enterprise see this pattern with about twice the frequency of those selling to small and very small businesses. Longer sales cycles may be a leading indicator of slowing demand. 4. 45% expect slower ARR growth this year and on average are reducing their ARR (annual recurring revenue plan) by 31%. 5. 89% of founders expect fundraising valuations to decline, about 11%, which is meaningfully less than the 60-70% correction in the public markets. 6. 42% have changed their fundraising plans, roughly split in half between accelerating and delaying their timing. 7. More than a third of founders polled are considering selling the company, raising venture debt, or raising an inside round. 8. About 20% of those polled will conduct a layoff, and on average will reduce headcount by 20%. 9. 50% of companies won't change compensation this year, 33% will increase it, and 17% will reduce it. 10. There's no correlation between the amount of money a startup has raised and its runway. Irrespective of total money raised, most businesses' have 18 months until their zero-cash date. To summarize, the data highlights that we're living in a market in flux. Founders feel less optimistic and acting on it by reducing burn, trimming growth expectations, and lengthening runway. Many boards recommend startups operate with a plan that provides the business 24 months' cash because the last two major recessions that resembled this one (1940s & 1980s) lasted between 12 to 18 months. The private market data, which shows a decline in round volumes, but stable valuations and round sizes, suggests top companies are able to command similar valuations. A word of caution: selection bias misrepresents true market conditions. Companies suffering through hard times won't raise for a while and their numbers aren't included in the May figures. Thanks to everyone who participated in the survey and attended the Office Hours.