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The market for startup investment has changed. From the hottest year in startup venture capital history to a period of pessimism, how did we get to where we are today?

The following digest of TechCrunch coverage looks to answer that question. We start with a historical run of stories beginning last December, threading through the start of the year until we reach the latest data from the VC ecosystem. Then we close with stories that have a few tips. Sound good? Let’s go.

How we got to today

The change in the market started last year, with falling stock market prices leading TechCrunch to begin to wonder if the ground was shifting under startups’ feet.

The era of ultra-rich software valuations could be behind us (December 2021)

After 2021’s venture capital goat rodeo — companies were raising two and even three times per year — it came as something of a surprise when the public markets started to get bearish while the private market was still in full-bull mode. Our question wound up being answered with a resounding yes as time went along.

Will the latest selloff finally shake up how investors value startups? (January 2022)

By January, it was clear that something had changed. Now our question was how quickly and where the damage would land. Startups can operate outside of the bounds of public-market sentiment, but the greater the gap, the less chance that such differing centers of gravity can hold.

Here’s how far VCs have lowered revenue expectations for seed through Series B (January 2022)

Alex Wilhelm took a look at Kruze Consulting’s data to understand how startup growth rates were changing and how much venture investors were expecting in terms of revenue performance before they raised any particular round. The gist? Things in January were still plenty warm. We include this particular entry to remind ourselves that even though hindsight is clear, even during the market correction, there were signals pointing in the other direction.

3 views: How should founders prepare for a decline in startup valuations and investor interest? (January 2022)

TechCrunch got to work to figure out how much the startup fundraising market was changing. Data for Q1 2022 wound up being somewhat fine, but with the damage stacking up more as the quarter wore on. In January, things were still pretty hot, even if the rumblings of uh oh were starting to add up.

It’s not a startup reckoning, it’s a recorrection (February 2022)

By February, our own Natasha Mascarenhas was already starting to name the market change, leaning on the phrase “recorrection.” This was a witty way of noting that we were going through a correction of a correction. First, startups hit the brakes when COVID landed and the economy froze; then, as 2020 and 2021 rolled on, they corrected their stance toward max burn and max growth. By the second month of the year, it was clear that a new behavioral adjustment was ramming its way through the market

So how much have things changed?

We have a lot on this topic, so we’ve picked and chosen somewhat. The following should provide a good look at our recent work to understand just where on the map startups and their backers are today.

It’s pivot season for early-stage startups (March 2022)

Layoffs may be one of the clearest signals that a startup is under duress, but it’s not the only one. In this piece, Natasha talks about how early-stage startups are pivoting — ahead of cuts — to be more cash-efficient, revenue-focused, and risk-averse.

If the earliest investors keep going earlier, what will happen? (April 2022)

Natasha wrote about the mixed messages in startup land right now: Early-stage investors are getting more disciplined and cash rich, but at the same time, the earliest investors are going earlier. Investors are pushing founders to be lean, but at the same time, offering them $10,000 to take PTO for a week and try their hand at entrepreneurship. The piece looks at how changing priorities could force emerging fund managers to change strategy (or fragment their way to failure).

Just how much has late-stage venture capital slowed? (April 2022)

The market’s changing pace is no joke — so TechCrunch has been busy at work trying to sort out the data from the commentary, looking to draw a more accurate picture of the new normal. The gist is that late-stage dealmaking is going through a seismic shift, while other startup series levels are a bit more stable, if not entirely healthy.

Consumer fintech trading revenues don’t measure up to SaaS ARR (April 2022)

Part of the market change regarding the value of startups and their recently public brethren is the fact that many concerns were given revenue multiples that did not fit their actual revenue profile. By that we mean that some software companies were valued like SaaS businesses, even though they weren’t. Watching those companies unwind billions in valuation was a lesson that during hot times, many companies will land a valuation that is actually a poor fit. It’s just noticing that early that is the hard part of the investing game.

Here’s how far startup valuations fell in Q1 2022 (May 2022)

We’ve seen new highs being reached over the past few years and now valuations are falling. Alex Wilhelm looked at Carta data to see where. Seed rounds have declined around 5%from Q4 2021 to Q1 2022. Series A and B have declined about 25% and 8%, respectively, from Q3 2021 to Q1 2022.

What now?

To close out, some notes regarding what to do in this changed world.

Cram downs are a character test for VCs and founders (April 2022)

If it came down to it, would you pay to play? Now they’re back as the economy is beginning to change and investors are faced with this question once again. Steve Blank explains the rationale behind why a founder would agree to a cram down — and advice on what they could do instead.

Does your startup have enough runway? 5 factors to consider (April 2022)

If you’re not good at budgeting, it’s time to learn for the sake of your startup. Marjorie Radlo-Zandi explains the significance of ensuring you have enough money to fund your startup. Your runway will vary depending on the industry you’re in, but Radlo-Zandi walks you through how to calculate this number and what to do if you get off track.

How to pitch me: 6 investors discuss what they’re looking for in April 2022 (April 2022)

Walter Thompson pens up a timely, honest look at what investors care about in the current market. As he notes, Carta claims that the number of seed deals funded between Q4 2021 and Q1 2022 fell 41%. Dollar volume also fell, dropping from $2.62 billion to $1.81 billion, representing a 31% decline. The survey brings together insights from investors, including 500 Global CEO Christine Tao and Maveron partner Anarghya Vardhana, to understand what they’re looking for when dollar slices get smaller.

What am I worth now? (April 2022)

It’s probably the question atop everyone’s mind right now. As public market values get slashed, how does that trickle down to the startup community, and more importantly, you? This piece includes an applicable valuation framework and other factors that may be impacting your price. Depending on where you’re at, today’s moment could be a refresh, a reset, or an entire reckoning.