What do Series A valuations look like in your city?
If you're in Silicon Valley, the median valuation (post-money) of a Series A startup has shot up to $63.9M in 2024 (software companies only, excludes biotech/hardware).
If you're in San Diego, your negotiation centers around a $41.7M valuation.
That's a pretty big gap!
Why the discrepancy?
Lots of reasons, but here are a couple. First, the rounds raised in places like the Bay Area and NYC do tend to be larger on average. That pushes up the post-money valuations as founders are loathe to over-dilute at the A round.
Also supply and demand plays a large role here. The hottest rounds in Silicon Valley are intensely competed for (perhaps to the detriment of the investor who wins the deal, given the fund economics). Not always the case that more capital automatically equals higher valuations, but the correlation exists.
We stripped out biotech and hardware to keep the focus on digital startups, but of course that still contains a wide swath of sectors. And AI dominates the Bay Area fundraising to a greater degree than in other metro areas.
Final point - yes, location matters. But the distribution of valuations even within a single metro area tends to be quite wide. No deal is exactly alike!
May you have a merry fundraising close to 2024.
#startups #founders #fundraising #SeriesA #valuations
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