In 2022, seed and early-stage valuations did not decrease as rapidly as late-stage ones, as younger startups are less affected by public markets. However, some investors believe there is still room for seed valuations to decrease. Kirby Winfield, founding general partner at Ascend, predicts that seed valuations will continue to decline by 5% to 10% before stabilizing. Drew Glover, a general partner at Fiat Ventures, also believes that valuations have not yet hit rock bottom and expects them to "come back down to earth".
Key takeaways:
- Every startup fundraising stage except seed saw median valuations decline in 2021 compared to 2022, according to data from PitchBook.
- In 2022, only the median late-stage and growth-stage valuations were down from 2021, while the median early-stage valuation continued to rise.
- A recent TechCrunch+ survey found that very few VCs actually expect valuations to rise again this year, with many predicting a continued drop in valuations.
- Investors predict that in 2024, stage and sector will matter more than ever for determining valuation trends, and there is still room for seed valuations to come down.