I don't think it's just a "market" thing at this point. Reality is if you're not a Tier 1 VC, which CRV really isn't, then you cannot get into good deals that would make any sense.
I think if you look at a lot of funds right now, you'll notice that they're all struggling to place. It's a question of inventory and while multiples are low (naturally as parking your capital in a savings account is yielding 5%) companies are not selling for less. I have seen multiples in ecommerce/saas startups go from 40-50x (early stage companies <5m ARR) to 15-20x. The appetite to sell your company for less than a 10 year DCF is really not there for founders. Cashflowing companies when capital costs are high are something you typically hold on to.
It's musical chairs and the music is currently stopped until interest rates break or until buyers (and their investors) start getting hungrier for acquisitions. This "sorry we can't place your $275M" scenario is a step in the latter's direction. T1 funds are also slowing down a lot since their main handoff is IPO and that is also dry.
tgtweak|1 year ago
It's musical chairs and the music is currently stopped until interest rates break or until buyers (and their investors) start getting hungrier for acquisitions. This "sorry we can't place your $275M" scenario is a step in the latter's direction. T1 funds are also slowing down a lot since their main handoff is IPO and that is also dry.