The comedown from venture capital’s torrid 2021 is sparing few startups.
The Exchange explores startups, markets and money.
The value of technology stocks began to decline in late 2021, a slide that continued into 2022, leaving many tech shops trading at a stiff discount to their recent valuation highs. Given that late-stage startup valuations are the most easily compared to those of public companies, it was expected that growth-stage investors would shake up their pricing models and perhaps reduce their risk appetite.
And while there is talk among investors regarding how expensive some very early-stage rounds are, from seed on up, it appears that no startup is safe from the slowdown’s effects.
Measuring the impact of a slowdown is harder when it comes to private companies. By definition, their financial information is private, meaning that we can’t know much about their revenue, margins, and varying profit metrics, which, in the case of pre-revenue companies, wouldn’t be very terribly pertinent anyway.
This makes Carta’s data particularly relevant for us: It provides us with the number of rounds and total capital raised by series for startups in the first quarter. The caveat is that the data only covers startups using the platform, but we haven’t singled out a factor that makes them necessarily different from their counterparts who don’t use Carta.
Let’s take a closer look at the data, before unpacking what it means. The number of rounds by series on Carta:
