As a SaaS founder, how should the currently ongoing correction of SaaS valuations affect decisions regarding further capital rounds? (series A)

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JASON LEMKIN

For now, make two assumptions:

  • Valuations have been cut in 50%.  So assume your company is worth half what it was in Q4’15.  And/or you’ll have to get twice as far to achieve a target valuation.
AND
  • Assume it will be twice as hard to get funded.  Many VCs are slowing things way, way down in Q1.  Others aren’t.  But even those are more skeptical.  And VCs are OK asking for flat rounds now.

We could be back to a local maximum soon enough.  But right now we’re still bouncing off a local minimum:

| Bessemer Venture Partners

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Published on February 29, 2016
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