Valuation
“Valuation”– a cartoon that illustrates the disconnect between public and private market valuations, particularly in the light of the recent sell-off in the public markets.
Last week, the Nasdaq Composite Index corrected by around 13% from its recent all-time high in November, putting the tech-heavy index in market correction territory.
However, this has not stopped the pace of new venture investments and many startups are seeing valuations that seem to defy the gravity of their unit economics or are in already highly crowded markets (hello there autonomous driving car companies and the nth crypto exchange).
Some of the reasons for this are the general lag between the two markets, but also many companies raised mammoth rounds with only a few investors, which means they do not need … or want to … go back out to raise more capital and likely see a down round.
For those companies outside this charmed circle, they will likely see more downward press on pricing in later stage rounds in the next couple of months.
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