> Negotiating tactic, misconception, or real phenomenon? I think a combination of all 3 depending on the situation. If you have a solid business with real tra

> Negotiating tactic, misconception, or real phenomenon? I think a combination of all 3 depending on the situation. If you have a solid business with real traction, $6-7m cap is seen as very reasonable. Investors probably wouldn't cite a market downturn for deals like this, and if they do it's most likely a negotiating tactic. If you're raising money for "the next big app" with no traction and asking for a $10-12m cap, there will probably be a lot more skepticism than there would have been a year or 2 ago. Note: This is based on my anecdotal experience in the bay area market. Numbers are probably lower across the board in other cities.