Evidence from 2023–2025 shows that software and startups did go through a prolonged period of distress beyond mid‑2023, matching the prediction.

• Funding environment stayed depressed well after 2022–mid‑2023. Global VC funding in 2023 fell 42% year‑over‑year to about $248B, the lowest since 2017, with Q4 2023 described as the harshest quarter for global VC in six years and U.S. deal volume at a 10‑year low.(cbinsights.com) In 2024, total VC dollars ticked up only modestly and were still roughly half of 2021’s peak, while global deal activity fell to its lowest level since 2016, indicating a continued drought for many startups rather than a quick return to boom‑time conditions.(barrons.com) Carta data further shows structural strain: by Q1 2024, 46% of seed rounds were bridge rounds and Series A activity had plunged 79% from 2022, highlighting how hard it remained for companies to progress up the funding stack.(axios.com)

• Valuations and exits remained under heavy pressure. CB Insights reports that median late‑stage deal sizes in 2023 were more than 50% smaller than in 2021, and 2023 saw just 170 VC‑backed IPOs worldwide—the fewest in a decade—showing a weak exit market and pressured late‑stage valuations.(cbinsights.com) Public SaaS valuations, a key benchmark for private software companies, stayed well below 2021 peaks and only began to rebound meaningfully in late 2024; the PVC SaaS Index was around 7–7.7x sales in 2023–2024, slightly below historical averages and far under the boom‑era multiples.(practicalvc.com) Commentators on the software IPO market note that 2023 effectively had only one major software IPO and that even by 2025 the IPO pace is still a fraction of 2021, underscoring how long exits remained constrained.(linkedin.com)

• Layoffs and startup failures continued well past mid‑2023. Tech layoffs in 2023 reached roughly 262,700 workers—59% higher than 2022—according to Layoffs.fyi.(startupnews.fyi) The pain did not stop in 2023: by June 25, 2024, trackers recorded 648 separate tech layoff events affecting over 151,000 people, and coverage described the environment as a continuing “bloodbath,” even if somewhat less severe than 2023.(poetsandquantsforundergrads.com) Carta’s internal data show that U.S. startup headcount shrank net in 2023 for the first time in years, with more departures than hires and nearly half of departures being layoffs, while equity grants for new hires dropped by more than a third as valuations cooled and down rounds became more common.(wsj.com) On top of that, U.S. startup failures surged: FT, citing Carta, reports a 60% rise in startup shutdowns year‑on‑year, with 254 venture‑backed clients going bust in Q1 2024 alone and the bankruptcy rate over seven times 2019 levels.(ft.com)

• Recovery by 2024–2025 was narrow and uneven. By 2024–2025, AI‑focused companies attracted huge funding and some SaaS names and IPO candidates began to recover, but overall VC activity and exit volumes remained far below 2021. Global VC in 2024 was still dramatically under 2021 in both dollars and deal count, with investment heavily concentrated in a small set of AI winners and many other software/startup segments struggling to raise or exit.(barrons.com)

Taken together, these data show that after the initial “software recession” leading into mid‑2023, the sector did endure an extended period—through 2023 and well into 2024—of weak funding, compressed valuations, high layoffs, and elevated shutdowns. That matches the prediction of a continued, multi‑year stretch of distress and pain rather than a quick post‑2022 snap‑back, so the prediction is best judged as right.