Recently I was fortunate to be invited to the Investor Round Table occasion in Dallas. There were investors from around the nation — including Chicago, San Francisco, and New York. These assets addressed pre-seed up to later-organize development equity. The reason for this meeting was for investors to collaborate to discuss current market conditions, portfolio needs, and arrangement stream. It was incredibly informative, and this is what I learned about the current state of venture capital.
1.”Flat rounds are the new up round.”
2.There are still arrangements getting done at 15-25x ARR. (It just takes one accomplice to get excited).
3.A $50M ARR bootstrapped organization went to the market and had a bid spread from $250M-$700M. (gigantic spread)
4.Series An is stalling-rounds that were $10-$15M are currently happening at $5M. Typically this is companies at around $1M of ARR.
5.Institutional LPs are weighing putting cash in the late-stage venture when they can purchase less expensive public companies.
6.Everybody is looking at the main PE reserves (Thomo Bravo and so on) to begin taking companies private to identify when something is genuinely “modest.”
7.There is a see-saw impact on how long originators are willing to ride out not raising and how lengthy investors can sit on capital without deploying it.