# Gilgal General Investor Update | Gilgal General, Inc.

- Canonical URL: https://wefunder.com/feed/174047
- Entity ID: wefunder:feed_item:174047
- Published at: 2024-06-15 05:59:59 UTC
- Updated at: 2025-07-17 14:12:00 UTC

## Author
Alexander Ampontuah

## Subject
Gilgal General, Inc.

## Content
Hello everyone!Just some thoughts on some key macro backdrop that we've observing in discussions with venture capital ecosystem in here New York and elsewhere, as well as few private equity and banks that I keep in regular communication lines. We have built plenty of technology. What we been dealing with along with everyone else here in New York and Silicon Valley have been dealing with is capital. Access to capital. Very challenging capital environment. This isn't a surprise to any investor out here.The general US economic data over the past 6-12 months period have been strong, despite persistently higher and longer elevated interest rates environment, so one conclusion is that firms and consumers have gotten used to a permanently higher cost of capital.Frigid and near frozen venture capital/private equity market. Housing related, crypto and leveraged fintech deals done 3-4 years ago at near zero rates (free money) will take time for VCs to digest and be felt for the next 9-15 months (roughly) given the higher/elevated cost of permanent capital. The US Fed is going to lower rates probably 1-2x this year in 2024, and probably another 2x next year 2025, but the end state will still be higher permanent cost of capital. Higher levels than when they first began to raise it back in February 2022. The new higher state of interest rates end state when the Fed is done cutting rates will take leverage/froth out of the system. Higher cost of capital than prior. This not difficult to logically line up. The lack of M&A or IPO market also has direct impact on LP's inability to consistently bring new money into new VC funds due to previously "trapped" capital in existing VC deals yet to have found an exit. This becomes a waiting game now. There will be some M&A's again (it's beginning but should start to pick up late this year 2024) but at discounted levels or forced sales. It will be a waiting game from here on out with some level capitulation mixed in.Higher rates will continue to negatively impact VCs investments done when interest rates were zero, this means VCs will especially need some more time for their prior years investments to digest before they can deploy/re-deploy capital making timelines fairly difficult to predict the next phase of financing cycle. It’s been a challenging period past 18-24 months. Partly because of the new higher elevated interest rate reset/regime which will de-lever some speculative VC/private equity investments. My strong feeling is that it will take another 9-12 months after the 3rd/4th Fed rate cut (June 2025) for the VC community to "liquify" again, purge some prior bad investment positions, return capital back to LPs (save goodwill), then capital will begin to circulate back into VCs ecosystem again. VC's need exits. It's that simple. Until then capital is trapped in the ecosystem unable to circulate due to the higher and elevated permanent cost capital and lack of M&A exits. When this cost comes down, that's when we will begin to get some liquidity into the venture capital ecosystem again. We are optimistic.Warm regards,Alex