How is the market for late-stage private tech companies? There has been considerable rhetoric on market slowdown (read here
. and that's just from last week!).
But what about the bigger private tech companies? Are they taking down-rounds (financing at a price that's lower than their previous capital raise)?
It certainly doesn't look like it. At a quick glance, I counted 5 $50 million+ capital raises from late-stage, US-based technology companies:
Using data from our friends at VC Experts, I looked at the per-share price change for these 5 companies. ALL FIVE companies had up-rounds:
The average gain was 32% from the last round of funding.
What can we imply from this? Well, 5 data points are hardly enough to say the market is fine. But we can assume that successful, proven late-stage companies are growing in valuation and raising capital at that increased price. What should be noted, however, is that there may be companies struggling to raise capital at a higher valuation than what they believe they should be worth. I'll wait to see a slew of $50M+ down-rounds before coming to that conclusion.
Getting the pulse of venture capital in the United States can be tricky. When the first quarter ended, reports were issued by firms that track venture capital activity and, depending on who you ask, things were either terrible, or flat, or pretty good.
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There is a lot of uncertainty about what the future holds for the venture ecosystem in 2016. These market forces seem to be suggesting to start-up CEOs that they should take as much capital as they can, even if it is from less than ideal investors.