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Original article
First Cut—State of Private Markets: Q3 2024
SoPM - First Cut Addendum Q3 2024.pdf
Key takeaway
- For entrepreneurs: Valuations and round sizes have stabilized across most stages in Q3 2024, suggesting a more predictable fundraising environment.
- For investors: The venture ecosystem shows signs of cautious optimism, with Series C valuations notably improving and overall funding levels remaining consistent.
Summary
Carta's "First Cut—State of Private Markets: Q3 2024" report provides preliminary insights into the U.S. venture ecosystem. The data indicates that median pre-money valuations and cash raised remained relatively steady compared to previous quarters across most funding stages. There's a sense of cautious optimism, particularly with Series C valuations showing positive movement. Round sizes have consolidated, maintaining consistency with Q1 and Q2 levels, pointing towards stability in the funding environment.
Insights
- Median pre-money valuations across most stages remained comparable to previous quarters, with slight declines still above Q1 levels.
- Series C valuations demonstrated markedly positive movement, standing out from other stages.
- Round sizes have consolidated, showing consistency with Q1 and Q2 figures.
- Series E+ round sizes returned to Q1 levels after a notable spike in Q2.
- The overall fundraising climate appears to be in line with early 2024 trends.
- Primary and bridge rounds show distinct patterns, with bridge rounds generally having lower valuations but showing more stability.
Implications
- Entrepreneurs may face a more predictable fundraising environment, allowing for better planning and expectations setting.
- Investors might need to be more selective, focusing on high-quality opportunities as the market stabilizes.
- The stability in valuations and round sizes could indicate a 'new normal' in the venture ecosystem post-pandemic and post-interest rate hikes.