Yesterday I was lucky to be invited to the Investor Round Table event in Dallas. There were investors from around the country – including Chicago, San Francisco, and New York. These funds represented pre-seed up to later-stage growth equity. The purpose of this meeting was for investors to collaborate to talk about current market conditions, portfolio needs, and deal flow. It was incredibly informative, and this is what I learned about the current state of venture capital.
“Flat rounds are the new up round.”
There are still deals getting done at 15-25x ARR. (It only takes one partner to get excited).
A $50M ARR bootstrapped company went to the market and had a bid spread from $250M-$700M. (huge spread)
Series A is stalling- rounds that were $10-$15M are now happening at $5M. Typically this is companies at around $1M of ARR.
Institutional LPs are weighing putting money in the late-stage venture when they can buy cheaper public companies.
Everyone is looking at the most significant PE funds (Thomo Bravo etc.) to start taking companies private to identify when something is genuinely “cheap.”
There is a see-saw effect on how long founders are willing to ride out not raising and how long investors can sit on capital without deploying it.
