Happy Sunday, mate Startup nerds.
Today we are talking about risk in the sense of gambling. You see, there’s a way for unicorns to avoid the painful dilution that happens when they raise capital, and a large number of the world’s billion-dollar startups seem to be taking the bet. But new data suggests that the bet some of the world’s most well-funded startups are taking may be more of an ambition than a sensible gambit.
The bottom line is this: Unicorns raised capital during the 2021 boom at prices that didn’t meet market benchmarks, so they’re holding off on raising capital until conditions improve. The bet you are taking is one that allows you to save money on the last cash transfer when the price improves and increase the value on the other side.
To understand what’s going on, let’s talk about unicorn funding arrangements, the state of valuations, and how long things can get when it comes to revenue multiples. This will bop.
