I have been think a lot about silos, or lack thereof, within startupland. Sometimes there’s an artificial wall that goes up between companies at different stages of growth, when in reality everyone is in the same room, drinking and tripping over the same mat.
Allow me to be more specific. While the late-stage market has cooled for tech companies, many early-stage investors say their portfolio companies aren’t too badly affected because they’re years away from an exit and have enough capital to cope with uncertainty. The same energy was on display this week at TechCrunch Early Stage. Peter Boyce II of Stellation Capital coyly told me that based on the term sheet he wrote yesterday, we’re still definitely in a founders-friendly market, while a pair of entrepreneurs told me Not-so-subtly reminded that experimental betting always lands major funding rounds.
I believe in optimism and view this period in early stage startups as a correction, not a reckoning. But, new PitchBook and NVCA data shows that the dollars are changing across the board.
The latest report says venture-backed companies attracted nearly $71 billion in the first quarter, lagging every quarter in 2021 but still ahead of pre-pandemic totals. Digging deeper into the startup phase, the research team reports that startup transaction sizes are starting to lean more towards historical norms than overblown nonsense (OK, OK, I made that last part up) . At the same time, valuations continue to grow with a median pre-money valuation at $12 million. A fun dichotomy that investors have to pay a pretty penny for.