For the past year, everyone’s been predicting that the muted exit environment and bone-dry funding market would bring a reckoning for many late-stage companies.
We’ve been seeing layoffs and cost-cutting measures across the board as companies look to shore up their balance sheets. And now, an increasing number of companies are raising money at lower valuations than their last investment. Unfortunately for startups, it seems these down rounds are here to stay.
Earlier this week, Alex Wilhelm dove into new Q1 data from Carta, which showed that the number of down rounds had nearly quadrupled in Q1 2023 compared to the same time last year.
Down rounds carry a negative connotation and are often interpreted as the fault of the company or founder. But in a market where everything seems to be heading downward, they shouldn’t imply a company or its foun …
