Mirror, Mirror on the Wall

“Mirror, Mirror on the Wall” – a cartoon that illustrates the increased willingness of VC firms to only hear what they want to in the valuation of their portfolio companies.

There was a record $30 billion in inside rounds in 2020, up 15% from 2019. An inside investment rounds is when only the existing investors choose to invest in a startup often with a higher valuation, which avoids a new investor with an independent mindset creating a market-based valuation.

One of the many problems of an inside round is that it can leave the startup with an unrealistic valuation.