Market Update: Peter Walker on 2023 VC Valuation Trends, Dry Powder, New Bubbles, Employee Trends

Subscribe to my newsletter The Split for new episodes emailed every week: https://www.thespl.it/ Brought to you by Attio, the next generation of CRM: https://bit.ly/AttioThePeel Peter Walker is Head of Insights at Carta and writes a newsletter called “The Data Minute”, a weekly newsletter highlighting data from over 43,000 private tech companies that use Carta’s platform to manage their cap table. He gives us into a deep dive on VC valuation trends, the fundraising landscape, and startup strategies. Timestamps:

(00:00) Intro

(04:50) Valuation trends in 2023

(08:10) Why Seed valuations went up over the past two years

(12:27) AI startups are getting higher valuations

(17:40) Why Biotech might be the next big bubble

(19:15) Boston as the 2nd largest VC ecosystem

(21:15) How SAFE’s work

(24:06) The impending SAFE reckoning

(26:13) Why startups don’t pay dividends

(28:31) Downrounds were 2x more common in 2023

(32:11) Almost half of all 2023 Series As were extensions

(35:34) Is there really a lot of dry powder?

(40:43) The emerging manager fundraising landscape

(48:19) Exit environment

(51:45) Why pre-Series B is the most common acquisition stage

(52:47) Liquidation preference & why an acquisition at Seed might make a founder more money than at a Series B

(55:59) Compensation market data

(56:38) Why the number of total startup employees shrank in 2023

(57:38) Why startup employees aren’t exercising their options

(1:00:57) Health of the secondary markets

(1:04:51) Most co-founder splits aren’t 50/50

(1:06:47) Why you should always vest co-founder equity

(1:09:30) 2023 record year for startup shutdowns

(1:17:19) Will other startup ecosystems ever catch Silicon Valley? Links: Carta’s Q4 ‘23 Private Market Report: https://carta.com/blog/state-of-private-markets-q4-2023/ Peter’s Newsletter: https://carta.com/subscribe/data-newsletter-sign-up/ Where to find Peter: Twitter: https://twitter.com/PeterJ_Walker LinkedIn: https://www.linkedin.com/in/peterjameswalker/ Where to find Turner: Twitter: https://twitter.com/TurnerNovak LinkedIn: https://www.linkedin.com/in/turnernovak/ Newsletter: https://www.thespl.it/