Funding and Exits
Anecdotal evidence indicates that in the current environment there are a lot of "extension" rounds or bridges from existing investors. The obvious reason for this situtuation is that it is hard to attract Series B and later round money in a climate where there is as much uncertainty as there is right now. By extension rounds, I mean selling additional shares of the previous round at the same valuation as the previous round to the same players. I suspect our research will show that Series B and later round activity in the second quarter was basically flat. We wont be able to get numbers for Q3 until near the end of November, but, anecdotal evidence indicates a decline in activity. Clearly a resolution of the current crisis in the financial markets can only help, but an improvement in the long term outlook for exits (both IPOs and M$A transactions) is what is needed to turn the investment tide.
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