RESEARCH TRIANGLE PARK – Downrounds surged as the pandemic swept the US earlier this year and investors pressed startup founders for better terms in order to secure cash. But that wave of deal-making has receded and founders are back in control of setting terms, according to a new report from Pitchbook.
“The proportion of down rounds across US venture deals rose to 13.6% in the second quarter, as the sudden and sweeping effects of the pandemic squeezed the economy. That was the highest percentage of deals done at lowered valuations since late 2017. Many felt that the pressure on founders to acquiesce on deal terms might be sustained—if not increase—throughout 2020,” Pitchbook says.
“The data shows that hasn’t been the case. Our Q3 US VC Valuations Report examines the return of founder-friendly terms and the measures that startups have taken to extend their capital runways.”
You can download the full report online.
