Happy Sunday, fellow startup nerds.
Today we are talking about risk in the sense of gambling. You see, there’s a way for unicorns to avoid painful dilution the next time they raise capital, and it appears that a good number of the world’s billion-dollar startups are at stake. But new data indicates that the bets that some of the world’s most well-funded startups are making may be more wishful thinking than intelligent gambling.
Here’s the gist: Unicorns, many of whom raised capital during the 2021 boom that no longer conformed to market norms, are holding off on raising capital until the situation improves. What they are betting is that they can keep their past cash alive long enough to make it through the valuation trough and move to the other side when prices improve.
To better understand what’s going on, let’s talk about how long things can go when it comes to unicorn funding events, valuation conditions, and the revenue multiple. This is going to be a bop.