Valuations for venture-backed companies at record highs
23 August 2021
Valuations for U.S. venture-backed companies are at record highs, per data released this morning by PitchBook.
Between the lines: It's the new normal, in which nontraditional investors are traditional, unicorns are pigeons and startups are in the driver's seat.
Inside the numbers: Valuation creep can be seen across all stages of the VC ecosystem, from seed to pre-IPO. It's also showing up in both the medians and averages, and also across quartiles, reflecting how this isn't just a few big deals skewing the data.
- Early-stage valuations hit all-time records in Q2 2021 of $50 million (median) and $105.4 million (average).
- Late-stage valuations also hit new highs, with the trendline suggesting that average late-stage valuations could top $1 billion by year-end.
- Value hunting: Deals in the four major tech hubs of SF, NYC, LA and Boston remain more expensive than deals elsewhere in the U.S.
What's happening: Most of this is just animal spirits running rampant, with price discipline now viewed as passé. Plus a ton of crossover money seeking yield and public equity markets forcing a reverse denominator effects on LP bankrolls.
- This often means that funds are owning smaller percentages of their portfolio companies, with average late-stage stakes falling below 20% for the first time ever.
- It's possible that a Fed taper or federal tax increases could grow valuation growth, but neither
What to watch: Fed tapering? Congress raising taxes on the wealthy? Maybe, but we've just lived through 18 months of a global pandemic that freaked out investors for all of five minutes.
- Until and unless the public markets repeatedly punch venture capitalists in the nose, forcing them to taste their own red ink, startup valuations will continue to rise. And there's no indication that's going to happen, after several years of feeling like it should happen.
Transcripts show George Floyd told police "I can't breathe" over 20 times
Section2Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.
Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.
The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.
- The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.
What the transcripts say:
- Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
- The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
- Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."
Read the transcripts via DocumentCloud.