“Portfolio Triage” – a new cartoon that illustrates how VCs are managing their portfolio companies in the recent market turmoil. Last week saw Klarna raise $650M in a down round of $6.5BN led by most of its existing investors (from a whopping $45.6 billion valuation in June 2021). Meanwhile, investors in crypto fintechs like Celsius Network and BlockFi, are unlikely to pump more money into the companies with the expectation they will either go bankrupt or be sold for cents on the dollar. For those companies that are still excelling, investors are still happy to keep increasing their valuation – for example, Branch which recently raised $300M at a $4BN valuation (4x increase since 2019). The most challenging group of portfolio companies for a VC firm are those companies that are good businesses, but just not excelling to become market leaders and achieve the high hurdle rate for success that VC funds need.

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