Zoom investor tells startup founders: ‘Forget the past three years’ and accept 50% valuation hit
- Founders are being advised to accept valuations 50% lower than just a few months ago, according to Eugene Zhang, a veteran Silicon Valley investor, and Nichole Wischoff, a startup executive turned VC.
- “The market is kind of marching together saying, `Expect a 35% to 50% valuation decrease from the last couple of years,” Wischoff said. “That’s the new normal, take it or leave it.”
- Founders who have to raise money in coming months need to test existing investors’ appetite, stay close to customers and in some cases make deep job cuts, Zhang said.
- Zhang believes the downcycle will likely be a protracted one, so he advises companies to accept valuation cuts, or down rounds, as they “could be the lucky ones” if the market turns even more harsh.
- https://www.cnbc.com/2022/08/11/zoom-investor-tells-startup-founders-forget-the-past-three-years.html
