Series A Pre-Money Valuations Down 25 to 50 Percent
Connie Loizos of Private Equity Hub interviewed Bob Ackerman, co-founder of Allegis Capital, regarding the current state of the VC industry. Ackerman made a few quasi-dire statements for both startups seeking capital and firms looking to provide capital, most notably:
In response to the current state of Series A pre-money valuations, Ackerman said:
Depending on the situation, you’re seeing pre-money valuations come down from 25 percent to 50 percent [for Series A deals].
According to Ackerman, there’s bad news for those you planning a Series B or C deal:
Bs and Cs have collapsed entirely because the capital in the pipeline isn’t moving.
And finally, Ackerman made a prediction about the future of the venture capital industry:
[F]rankly a lot of VCs are going out business — I’d say 25 percent of them will disappear.
About the Author
Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. Click here to learn more about his practice.
