Funding Fridays No. 10
Headwinds in Venture Capital
Jérôme Prax
Happy Friday!
Welcome to Funding Fridays – a briefing on startup funding.
Bracing for a Change
2021 was a great time to launch startups and raise money because: (1) Labor markets have tightened up coming out of the pandemic. This increases labor costs for startups, but it seems to be pushing people to launch new startups as new business formations have jumped in the last six months. (2) Record breaking amounts of venture capital has been invested, due in part to the fact that the deal size at each stage has increased. (3) Deals have become more founder-friendly. There has been a decrease in participating liquidation preference and an increase in the step up of valuations from round to round. However, there are indicators that VC is bracing for a slowdown due to: (4) Investors have left themselves vulnerable to valuation corrections by sacrificing protective deal terms in exchange for access to deal flow. (5) The prospect of increasing bond yields may reduce venture’s allure for LPs, but that effect will likely be tempered if inflation persists. Pitchbook (22 minutes)
The Funding Divide
How does your race or gender impact your ability to raise VC funding? Here are some stats from 2021: All female teams raised 25% less than all male teams. Teams with minority members raised 29% less than all-white teams. All female teams with minority members had 158% more investor meetings than in 2020, but still raised the least amount of money. How does race or gender impact the scrutiny of your pitch deck and your fundraising outcome? Investors spent an average of 3:44 on all female teams and they raised and average of $1.5M. Investors spent an average of 3:46 on all male teams and they raised and average of $2M. Investors spent an average of 2:51 on mixed teams and they raised and average of $1.5M. Investors spent an average of 3:57 on teams with no minorities and they raised and average of $2.4M. Investors spent an average of 3:23 on teams with minorities and they raised and average of $1.7M. DocSend (16 minutes)
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Pre-Seed
Money Raised – $600,000
Median amount raised in startup Pre-Seed funding on April 01, 2022.
Westaway
Pre-Money Valuation – $3,975,000
The median valuation of a startup Pre-Seed funding on April 01 2022
Westaway
Seed
Money Raised – $3,000,000
The median amount raised in startup Seed funding on April 01, 2022.
Westaway
Pre-Money Valuation – $9,901,361
The median valuation of a startup Seed funding on April 01 2022
Westaway
Series A
Money Raised – $14,000,000
The median amount raised in startup Series A funding on April 01, 2022.
Westaway
Pre-Money Valuation – $80,000,000
The median valuation of a startup Series A funding on April 01, 2022.
Westaway
Series B
Money Raised – $33,000,000
The median amount raised in startup Series B funding on April 01, 2022.
Westaway
Pre-Money Valuation – $460,000,000
The median valuation of a startup Series B funding on April 01, 2022.
Westaway
Series C
Money Raised – $60,000,000
The median amount raised in startup Series C funding on April 01, 2022.
Westaway
Pre-Money Valuation – $790,000,000
The median valuation of a startup Series C funding onApril 01, 2022.
Westaway
About Funding Fridays
Funding Fridays is a two-minute Friday morning briefing on startup funding written by Kyle Westaway – Managing Partner of Westaway.
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