Big question - will early stage startup valuations keep falling?
Read a fascinating piece by Nnamdi Iregbulem yesterday titled The Shadow Price of Venture Capital. Core argument: given the major decline in venture funding, valuations for startups are still too high and will eventually fall further.
In his words: "Venture valuations are a function of capital flows".
Of course, gotta jump into my Carta data set when I see an well-reasoned argument like this one.
𝗪𝗵𝗮𝘁 𝗱𝗼𝗲𝘀 𝗖𝗮𝗿𝘁𝗮 𝗱𝗮𝘁𝗮 𝘀𝗮𝘆?
The gap between total invested capital and median pre-money valuations is greatest in the earliest stages and narrows considerably in late stage (Series C and beyond, not shown).
My two cents is that valuations are probably unlikely to dramatically decline in the later stages from today - but the earliest part of venture is another story. Will investor optimism and long-term bias overcome the funding gap?
Great piece, be sure to read it (linked in the first comment below)
Whither startups? Let me know what you think!
#cartadata #valuations #fundring #venturecapital #earlystage #latestage
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