Ya think?
From PitchBook, June 13:
In February, H1, a healthcare analytics specialist, decided to raise additional capital just months after closing a $100 million Series C at a $750 million valuation, led by Altimeter.
That turned out to be a good call. H1 received commitments from insiders for a $23 million Series C extension—at the same valuation and terms most recently agreed upon. The financing was agreed to shortly before market conditions for tech stocks and pre-IPO companies took a turn for the worse.
"Our investors told us if you had started [fundraising] later, it would have been a down round," said Ariel Katz, H1's co-founder and CEO.
After years of aggressively offering capital to startups with fast growth and high cash burn, VC investors have turned much more selective as the venture market's 13-year bull market comes to a screeching halt. It is still early days, but VC deals that used to be founder-friendly at high prices have been replaced by hallmarks of a downbeat climate such as decreasing valuations and investor-protective terms.
At the same time, investors are agreeing to stepped-up prices on a few companies that are showing especially strong prospects. But even those startups often increasingly settle for deals with flat or only modest valuation increases, investors said.
In a down round, a company sells shares at a price below its previous round's valuation, and these tend to be punitive for earlier investors, founders and employees. PitchBook data has yet to register an uptick in the number of recent down rounds, but some investors said that many more startups that need funding are now considering such unfavorable deals as an option....
....MUCH MORE
