Startup valuations in Silicon Valley are just different.
Seems obvious, but where your startup is based matters. The Bay Area in particular has a logic all its own, and walking in to a VC negotiation with the wrong market reality can cause friction.
Data below shows the median Series A valuation (post-money) for startups raising in 15 ecosystems across the US. Orange bars indicate the range (25th percentile up through 75th percentile).
We only included software startups in this analysis (so no biotech, no hardware, etc). Yes, AI is included.
𝗧𝗼𝗽 𝟱 𝗘𝗰𝗼𝘀𝘆𝘀𝘁𝗲𝗺𝘀 𝗯𝘆 𝗠𝗲𝗱𝗶𝗮𝗻 𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻
1. Bay Area 2. New York City 3. Denver/Boulder 4. Seattle 5. DC
Kinda odd right? Not exactly the list you'd expect, although each of these top 5 has a solid Series A market right now.
𝗧𝗵𝗶𝗻𝗴𝘀 𝘁𝗼 𝗣𝗼𝗻𝗱𝗲𝗿
If we pulled this list for a different time period, a different stage, or a different industry, things would look...different! There are only a few constants in comparing startup ecosystems, one of which is the Bay Area pricing functions very differently than other hotspots.
So - why is the Bay different? It's a confluence of factors. Talented founders flock to Silicon Valley, there are deep pools of capital available there (along with multistage VCs who can compete on price at early stages), and the "norms" of VC are very much in concrete.
Medians are useful but incomplete. Look at the range bars in the graphic - so many places across the country overlap with the Bay for a large portion of deals.
Is the highest valuation always the right choice for your business? Clearly not! If the hangover from 2021 has taught us anything it's that a sky-high valuation can become a weight on a company rather than a boost.
Round sizes vary alongside valuation but dilution is in a far narrower range. The median dilution in all of these cities was between 19%-22%.
Run your race your own way. But if you're chasing the biggest numbers, we'll see you in SF.
#startups #founders #SeriesA #valuations #fundraising
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