The unicorn valuation gambit
Happy Sunday, fellow startup nerds.
Today we’re talking about risk in the gambling sense of the word. You see, there’s a way for unicorns to avoid painful dilution when they next raise capital, and it appears that a good number of the world’s billion-dollar startups are taking the wager. But new data indicates that the bet some of the most well-financed startups in the world are taking could be more wishful thinking than intelligent gambit.
Here’s the gist: Unicorns, many of which raised capital during the 2021 boom at valuations that no longer square with market norms, are holding off raising capital until conditions improve. The bet they are taking is that they can survive off their last cash haul long enough to make it through a valuation trough and raise on the other side, when prices improve.
To understand what’s going on, let’s talk unicorn funding events, the state of valuations and how much longer things might be Somewhat Shit when it comes to revenue multiples. This is going to be a bop.