Down Round Technical Review Technology 
VC Cafe
FEBRUARY 27, 2023
For the past 10 years, with interest rates near zero, VC investors plowed record amounts into tech startups and enjoyed a seemingly ‘easy’ investing environment. Prices went up from round to round, and startups were encouraged to grow, grow, grow, and not to worry about profitability. Luck favours the bold!
Both Sides of the Table
JUNE 5, 2011
2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. This article originally appeared on TechCrunch. I acknowledged this in the article. Increase price.
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Both Sides of the Table
JULY 29, 2010
The A round was done in February 2000 (end of the bull market) and my B round was done in April 2001 (bear market). As a result I had to do a down round. Down rounds are psychologically really difficult on companies and can make it harder to do later rounds. I eventually needed more money.
Both Sides of the Table
JUNE 22, 2011
Responses ranged from, “hey, they’re in a HUGE market&# to “it is an amazing company and their technology rocks.&# It’s like people arguing that there’s a beautiful beach house in 2006 that represents great long-term value due to scarcity of similar property. New investors hate down rounds.
VC Cafe
FEBRUARY 27, 2024
Carta reports that 20% of the rounds in 2023 were down rounds, but I believe the actual number is much higher. For that and other reasons (like cash preservation) VCs moved to focus more on earlier stage, and many funds that typically invest in A started deploying more into seed rounds.
Both Sides of the Table
JUNE 30, 2016
And if you raise the “5 on 20” and don’t grow into your next-round valuation you’re stuck because venture investors HATE doing down rounds. The data suggests that the investors have a much easier time hitting a $100–200 million outcome than a $400–500 million outcome so it’s easier to commit at lower prices.
Lightspeed Venture Partners
OCTOBER 7, 2012
I’ve been writing up reviews of this season’s Shark Tank pitches from a silicon valley VCs perspective. This time I’ll break down week four of this season. Doing the research to form your own view of a company’s prospects is called due diligence. BACK 9 DIPS. The entrepreneur was clearly desperate.
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