How Will the 52% Correction in the Stock Market Impact the Startup Fundraising Market?
Tomasz TunguzVenture Capitalist at Redpoint If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. How Will the 52% Correction in the Stock Market Impact the Startup Fundraising Market?
The public software sector is weathering the second deepest multiple contraction in the last decade. Only the 2016 reduction of 57% surpasses it. Public market investors are rotating out of high growth technology companies as the Fed’s policies of quantitative easing, asset purchases, and low rates abate. The question on every software founder’s mind today must be, how will this affect the private financing markets? As a company’s scale approaches that of a public company, the greater the impact on their fundraising. Three corrections in the last ten years have contracted multiples by 40% or more. These are marked in peachpuff orange rectangles above. The Series D mean round size is plotted in red. 2014’s correction stalled and then reversed Series D round sizes for 2 years through the second correction in 2016. For the next 3 years, Series Ds increased in size until the late 2019/early 2020 correction of 41%. If history serves as an occasionally-correct guide, later stage valuations should flatten and fall in 2022, especially in light of the doubling of round sizes in the last 18 months. Series As don’t imitate this pattern, remaining insulated from the vacillations of the market. Corrections may subdue the growth rates, but haven’t reversed them in the past. One could argue the slopes in the round sizes differ from last time. Ds doubled in 18 months starting in 2016, and again doubled from $75m to $150m in 2020-2021 - so the growth has been steeper on the way up and that may suggest a more sudden correction on the other side of the peak. |
Older messages
Is Compensation Stagnation to Blame for the Great Resignation?
Tuesday, January 18, 2022
Tomasz Tunguz Venture Capitalist at Redpoint If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Is Compensation Stagnation to Blame for the Great
How Correlated are the Web 2 and Web 3 Software Markets?
Friday, January 14, 2022
Tomasz Tunguz Venture Capitalist at Redpoint If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. How Correlated are the Web 2 and Web 3 Software
Do Data Startups Command a Premium in the Fundraising Market?
Wednesday, January 12, 2022
Tomasz Tunguz Venture Capitalist at Redpoint If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Do Data Startups Command a Premium in the
The Top Sectors of Web3 in 2022 by Revenue
Tuesday, January 4, 2022
Tomasz Tunguz Venture Capitalist at Redpoint If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. The Top Sectors of Web3 in 2022 by Revenue With
My Favorite Books of 2021
Thursday, December 30, 2021
Tomasz Tunguz Venture Capitalist at Redpoint If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. My Favorite Books of 2021 These are my favorite
You Might Also Like
🚀 Axiom Facing Liquidity Issues
Friday, September 20, 2024
Plus DirecTV and Dish merger talks, $LUNR's $4.8B IDIQ, Wall Street upgrades/downgrades, and more! The latest space investing news and updates. View this email in your browser The Space Scoop Week
Shiftx AI, View AI Ready Data as a Service (DaaS), and hanabi.rest
Friday, September 20, 2024
AI-based API building platform BetaList BetaList Daily Shiftx AI Improve your processes with AI View AI Ready Data as a Service (DaaS) Get Your Company's Data Ready for AI hanabi.rest AI-based API
Will We See a Better Exit Market Next Year?
Friday, September 20, 2024
Tomasz Tunguz Venture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Will We See a Better Exit Market Next Year? The Fed cut rates
Tips to help make consistent content creation a habit
Friday, September 20, 2024
Plus tips, news & Buffer updates for your social media journey ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Issue #126: Building $1K-$10K MRR Micro SaaS Products around Automated Address Change Management, Rundown Creation…
Friday, September 20, 2024
Build Profitable SaaS products!! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
10words: Top picks from this week
Friday, September 20, 2024
Today's projects: Relay.app • memoiri • Strike Analytics • Notion Finance Tracker Template • OpenLang • Ruly • Ad Agency • Homer • Super Agent • PhotoFairy • Revnue • VideoTrim.app 10words Discover
🚨 48 hours left - are you in?
Friday, September 20, 2024
Don't get left behind - $100m lesson! Hey Friend , You've been waiting for the right moment to start your own premium ecommerce business… Well, this is it. In about 48 hours, the Start Your
The AI-Powered Solopreneur — The Bootstrapped Founder 347
Friday, September 20, 2024
AI is revolutionizing the way I work as a solopreneur. So why not share exactly how I use it?
Let's talk about E-S-G
Friday, September 20, 2024
Plus: The French billionaire upping his tech investments; latest deals View in browser Silo flagship Good morning there, Yesterday at one of London's central schmoozing spots a couple hundred
🗞 What's New: YouTube just launched Hype to help small creators get discovered
Thursday, September 19, 2024
Also: Running newsletter ads!