Happy Sunday mate budding geeks.
Today we are talking about risk in the gambling sense of the word. You see, there’s a way for unicorns to avoid a painful dilution when they next raise capital, and it looks like a good number of the world’s billion-dollar startups are taking the bet. But new data suggests the bet some of the world’s best-funded startups are making may be more wishful thinking than a smart gambit.
Here’s the gist: Unicorns, lots of them capital raised during the boom in 2021 at valuations no longer in line with market norms, withhold capital raising until conditions improve. The bet they are making is that they can survive their last cash out long enough to break through the valuation bottom and raise on the other side when prices improve.
To understand what’s going on, let’s talk about unicorn funding events, the state of valuations, and how much longer things can be a bit of a dud when it comes to earnings ratios. This will be a bop.