The late-stage venture market is crumbling

Late-stage dealmaking in the startup market is contracting sharply, with valuations for Series D rounds and later declining by 60%, which could be seen as a negative for startups seeking pre-IPO capital but a positive for filtering out weaker companies and recycling human capital faster.

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Relevant topic timeline:

8/4/2023

‘Tidal Wave’ of Down Rounds Hits Startups

- Turntide Technologies, a unicorn company backed by Breakthrough Energy Ventures, is nearing a deal for new capital that would significantly reduce its valuation by over 80%. - The startup world has seen a surge in down rounds, with some companies planning "cram-down" rounds of financing that heavily dilute existing investors' stakes. - Other companies, such as Nuro and Quora, have also discussed similar moves that could lead to cram-downs. - This trend indicates a significant shift in the investment landscape, with investors and lawyers noting the increasing prevalence of down rounds and potential dilution of ownership rights.

8/15/2023

The pre-seed market is recovering, but investors increasingly have the upper hand

Main topic: The state of the pre-seed startup funding market Key points: 1. Pre-seed startups are starting to recover in terms of funding, with $972 million raised in the second quarter, a 17% increase from the first quarter. 2. Investor-friendly terms are becoming more common, making it harder for founders to negotiate favorable terms. 3. The number of pre-seed deals has declined for four consecutive quarters, indicating a decrease in the number of deals closed. Hint on Elon Musk: This article does not mention Elon Musk.

8/25/2023

Manatt Ventures VC Market Update – August 2023

The lack of funding for emerging managers in venture capital is impacting early-stage funding opportunities, as VC fundraising decreases and the number of new startups declines, but there is a slight thaw in exits via public markets with promising IPOs from companies like Cava.

8/29/2023

The IPO drought was worse than you thought

The American venture market has been experiencing a significant decline in technology IPOs, but the recent filings of public-offering paperwork by Instacart and Klaviyo stand out as important milestones in a market that has seen a lack of startup exits for over 1.5 years.

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Posted 8/23/2023, 5:01:17 PM