5 ms·

> "so far we haven't seen nearly as much of an effect on early-stage fundraising as the level of press coverage would seem to indicate" This is pretty interest

> "so far we haven't seen nearly as much of an effect on early-stage fundraising as the level of press coverage would seem to indicate" This is pretty interesting to me. I wonder if the press is just blowing things out of proportion, or if there's some Big Money™ behind this so that investors can convince companies to agree to worse terms.

sama 11y ago
It's definitely had a big effect at late stages. Early stages may not have been mis-priced, or it just may take longer to filter down. We don't know yet.
api 11y ago
It's the unicorn crash. It's mostly affecting later stages of hugely valued companies. So far the impact in the seed and A markets and more reasonably valued companies is minimal. Whether that changes depends on a bunch of factors. The two biggest are the overall health of the economy and how economically incestuous high-tech has become. If write-downs and possibly failures among the unicorns trickles down a lot to smaller ventures and investors, it will get worse. Otherwise it will be mostly isolated to that segment of the market. Edit: check the other response to the parent-- looks like we might indeed be seeing a pullback in angel/seed.
sharkweek 11y ago
Hmm in the aggregate, we reported a pretty sharp decline in 3Q and 4Q 2015 for angel/seed round count - http://imgur.com/CSqVOVQ http://imgur.com/CSqVOVQ I don't think the sky is falling, but people are tightening up on the number of deals being done, there's no doubt about that.
mathattack 11y ago
Early funding is a very small part of the overall pool of capital available. If every seed round is $2.5 million, 10,000 seed deals (~100X YC's size) is $25 billion in capital spent. For context: - It's less than ten percent of Google's market cap ($490 billion) [0] - The average Series D or later round is 40x higher ($100 million) [1] - It's less than a tenth of a percent of the US bond market ($40 trillion.) [2] Net - seed funding is just not a lot of money compared to the market at large. If founders and VCs have money, they can spend it. It gets very different later on. [0] http://www.google.com/finance?cid=304466804484872 http://www.google.com/finance?cid=304466804484872 [1] https://www.preqin.com/docs/press/Venture-Capital-Q1-15.pdf https://www.preqin.com/docs/press/Venture-Capital-Q1-15.pdf [2] http://money.cnn.com/2015/10/14/technology/cb-insights-venture-capital/ http://money.cnn.com/2015/10/14/technology/cb-insights-ventu... [2] https://en.wikipedia.org/wiki/Bond_market https://en.wikipedia.org/wiki/Bond_market

sama 11y ago

It's definitely had a big effect at late stages. Early stages may not have been mis-priced, or it just may take longer to filter down. We don't know yet.

api 11y ago

It's the unicorn crash. It's mostly affecting later stages of hugely valued companies. So far the impact in the seed and A markets and more reasonably valued companies is minimal. Whether that changes depends on a bunch of factors. The two biggest are the overall health of the economy and how economically incestuous high-tech has become. If write-downs and possibly failures among the unicorns trickles down a lot to smaller ventures and investors, it will get worse. Otherwise it will be mostly isolated to that segment of the market. Edit: check the other response to the parent-- looks like we might indeed be seeing a pullback in angel/seed.

sharkweek 11y ago

Hmm in the aggregate, we reported a pretty sharp decline in 3Q and 4Q 2015 for angel/seed round count - http://imgur.com/CSqVOVQ http://imgur.com/CSqVOVQ I don't think the sky is falling, but people are tightening up on the number of deals being done, there's no doubt about that.

mathattack 11y ago

Early funding is a very small part of the overall pool of capital available. If every seed round is $2.5 million, 10,000 seed deals (~100X YC's size) is $25 billion in capital spent. For context: - It's less than ten percent of Google's market cap ($490 billion) [0] - The average Series D or later round is 40x higher ($100 million) [1] - It's less than a tenth of a percent of the US bond market ($40 trillion.) [2] Net - seed funding is just not a lot of money compared to the market at large. If founders and VCs have money, they can spend it. It gets very different later on. [0] http://www.google.com/finance?cid=304466804484872 http://www.google.com/finance?cid=304466804484872 [1] https://www.preqin.com/docs/press/Venture-Capital-Q1-15.pdf https://www.preqin.com/docs/press/Venture-Capital-Q1-15.pdf [2] http://money.cnn.com/2015/10/14/technology/cb-insights-venture-capital/ http://money.cnn.com/2015/10/14/technology/cb-insights-ventu... [2] https://en.wikipedia.org/wiki/Bond_market https://en.wikipedia.org/wiki/Bond_market