Navin Chaddha
Contributor
Navin Chaddha is managing partner at Mayfield, an inception and early-stage investor with more than 50 years of a people-first investing philosophy.
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Mayfield’s Navin Chaddha: I’ve looked at clouds from both sides now
Survival tips for startup founders living through their first market correction
When I wrote this post in August 2021, we were at the peak of exuberance in VC investing and startup valuations. I bemoaned the decline in early-stage investing and feared that innovation would suffer as a result of it.
The VC industry is turning back to its roots of investing at the early stage, although activity is still dramatically lower, with Q1 US 2023 data showing a 53% decrease in deal value and a 52% decrease in deal count at the seed stage year over year. Similarly, we’re seeing a 60% decline in deal value and a 47% decrease in deal count at the early stage of investing year over year. While I welcome this focus back to early-stage investing, I am sorry that it has come at the cost of hundreds of thousands of layoffs and continued challenges for startups.
However, I am sounding another note of caution today. As a pure inception-stage firm which has partnered with founders for more than five decades and guided over 225 companies to successful exits (including 120 IPOs and over 225 acquisitions), I know that early-stage investing is a craft that is honed over time, not a hobby or tourist destination.
While it might seem daunting for founders to question potential investors in today’s …
