On the one handwe’re going to Y Combinator Demo Day week, which means we’re about to sit back and watch a few hundred companies pitch their pitch to investors and the larger startup world.
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On the other hand, the event comes just days after noted Y Combinator graduate Instacart decided it had to lower its valuation to stay competitive for talent.
But the late-stage fear we recently explored is just one facet of the overall startup market, which includes both early funding – angel, seed, etc. – and rounds like Series As and Bs. We can’t just say that late-stage startups wake up to a changed market and let it sit for a day. We need to understand the full picture.
PitchBook released a report this morning looking at the market trends that contributed to the venture capital boom in 2021. Recall that last year was a record year for venture activity across many geographies, with private market capital being invested in startups. was flowing at a rate that we may not see in years to come.
The PitchBook report hints that overall venture capital activity is slowing, with an attached chart showing monthly activity in the United States sliding down from its late 2021 peak. But we wanted to know more, so we dug into the data.
Based on our look at the raw numbers and what we’re hearing, we’re in what could be the early stages of a business slowdown. How material the period of reduced investor activity will prove to be is the real question of the day.
Not that you’d really suspect that things are changing when you look at early stage valuations. This piece of information from startup founder and investor Ryan Hoover we noticed during the weekend: