Camber Creek reposted this
Founders, pay attention: the valuation you set in your first institutional VC round will ripple through every step of your journey. Right now, the market's a tale of two extremes: while Seed valuations have surged over 11% to nearly $15 million this year, Series A and beyond are facing a harsher reality. Volumes and valuations at later stages have dropped sharply—Series A rounds are down 17% in deal size since last year. Why does this matter? Because overvaluing your early rounds might feel good today, but it could make you the last person at the table in a down market tomorrow. Once you’re off the ground, maintaining momentum requires scaling under a framework investors can believe in. Avoid the temptation to over-optimize for today’s valuations, and instead think about the fundraising journey as a marathon, not a sprint. This is especially relevant for proptech founders, where the industry’s average Series A valuations have seen a 20% contraction from their pre-2022 highs. In proptech, asset-heavy business models and slower scaling cycles mean that sustaining high early-stage valuations can quickly become a double-edged sword if market conditions tighten. Securing a realistic valuation from the start is essential not only to attract follow-on investment but also to align with the capital-intensive, long-term growth patterns that characterize proptech. Get that initial valuation right—it’s not about what it lets you claim now; it’s about keeping the doors open and your options alive when it counts. #vc #venturecapital #startups #founders #proptech #realestate #contech #construction #tech
Do you have a valuation strategy or formula you typically guide founders towards for setting realistic targets and striking the right balance? You’re working with such limited data at these early stages it really feels more like “here’s what I need, to accomplish x, here’s how much I’m willing to sell for it†- more art than science, but curious how you look at it.
Very good point. I would argue that the amount raised is even more important. Most investors request liquid prefs, meaning founders need to pay back at least 100% of the investment before getting a share of the exit. My 2 cents here to founders is to raise what you need, not what you can.
Wow great timing. Just left a tech conference today. Decisions require you to talk to someone you trust outside the “deal zoneâ€who is willing to risk your right hook. “Stuff†happens right? Markets change, customers are fickle and not everything is a grand slam everyday. Be true to your vision without robbing you of the fun. Enjoy the ride! ;)
This is absolutely true!
Supervision & Regulation @ The Fed
5dThanks for the thoughtful post, JP. Can you opine on the downstream risks of undervaluing or under-negotiating your seed raise? Obviously the founder experiences greater dilution, but can you offer your insights on "catching up" or recovering from an overly conservative early valuation?