This Week in Startups

Series A valuations, M&A in 2024, and M.A.N.G with Jason Shuman and Raja Doddala | E1883

Jan 20, 2024

01:02:24

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Jason Shuman and Raja Doddala discuss trends in startup valuations heading into 2024. They delve into current valuation methods, cautioning investors. They also explore competition for dollars in the venture capital industry and the rise of strategic investing. The speakers analyze challenges faced by startups, the importance of series A funding, and managing liquidity in venture capital funds. They also explore success stories of companies in the bottom third and touch on potential M&A interest.

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Quick takeaways

Series A valuations have increased by approximately 17% in Q4 2023, reaching peak pricing.

Late-stage valuations for Series E and beyond have increased by 182% in one year, driven by strategic investments from tech giants.

Thoughtful portfolio construction and managing liquidity are crucial in venture capital, with diverse approaches for seed and later-stage funds.

Deep dives

Startup Valuations in 2024

The podcast episode discusses the current trend in startup valuations for Series A rounds. The median Series A valuation has increased by approximately 17% from $38.8 million in Q3 2023 to $45.5 million in Q4, reaching peak pricing. The valuation landscape varies depending on the type of company, with seed infrastructure deals driven by the AI boom having a median valuation of $39 million. In contrast, predictable growth companies in the B2B SaaS space are going for 8 to 12 times next 12 months revenue. The podcast participants discuss the potential challenges and risks associated with investing in companies with high valuations but little traction.

Series A Investment Trends and Challenges

00:45

Investor learnings on portfolio management and follow-on investments

01:45

Financial Engineering and Double Counted Valuations in Investment

01:09

Introduction

2min

Analyzing Startup Valuations in 2024

9min

Investment strategies, loan options, and price sensitivity as an early-stage investor

1min

Competition for Dollars in the Venture Capital Industry

9min

Late-Stage Funding Distortion and Open Phone Sponsor

2min

The Rise of Meng and Strategic Investing

9min

Uncertainty in the AI Enclave and Challenges for Startups

2min

Startup Valuations and the Importance of Series A

3min

Managing Liquidity in Venture Capital Funds

18min

10.

Lessons Learned from Successful Bottom Third Companies

6min

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Today’s show:

David Weisburd hosts Jason Shuman, Raja Doddala, and Jason Calacanis to dive into 2024 startup valuation trends (2:00), insights on how VCs can secure great deals in a competitive market (17:46), a detailed look at secondary deals (36:25), and more!

Timestamps:

(0:00) David Weisburd hosts Jason Shuman, Raja Doddala Jason Calacanis to dive into the world of VCs, LPs and GPs.

(2:00) A look at the encouraging trends in startup valuations as we head into 2024.

(6:39) Delving into the intricacies of current valuation methods and key aspects investors should be cautious about.

(11:22) Paintbrush - Visit http://www.getpaintbrush.com to see if you qualify for a $50K startup loan in less than 2 minutes

(13:42) Examining the balance of demand and supply in the seed funding stage of new startups.

(17:46) Insights on how venture capitalists can secure the most sought-after deals in today's competitive market.

(22:00) OpenPhone - Get 20% off your first six months at https://www.openphone.com/twist

(23:29) Discussion about M.A.N.G., a rising player in the venture capital scene.(28:26) Exploring the unique and often controversial practice of round-tripping in the venture capital industry.

(33:03) Lemon.io - Get 15% off your first 4 weeks of developer time at https://www.Lemon.io/twist

(36:25) A detailed look at Lexington's successful raising of $22.7 million in secondary investments.

(57:24) Observing the recent increase in mergers and acquisitions activity within the industry.

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Check out David’s other podcast here: https://www.youtube.com/channel/UCncFI0XEvTu7k4er6BgVN9g

Thanks to our partners:

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(22:00) OpenPhone - Get 20% off your first six months at https://www.openphone.com/twist

(33:03) Lemon.io - Get 15% off your first 4 weeks of developer time at https://www.Lemon.io/twist

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