Did private-market valuations actually reset after the 2021 downturn, or were they masked by deal structuring?

Brad Gerstner · Oct 10, 2022

This is not a 'blood in the streets' moment; despite public growth names being down 40-70%, valuations are still full and venture Series C/D/E is still overvalued

Measured against January 2020 levels, most of these companies are merely back to normal or slightly below average valuations — that shows how far out in left field valuations had gotten

Scope: as of October 2022; applies to venture C/D/E stages

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Jeff Seibert · Nov 22, 2023

Valuations will still crash dramatically from here and there will be huge layoffs in Q1 and Q2, with 2024 very tough as companies down to six months of cash fail to raise follow-on rounds

Many companies that raised and struggled through 2023 are now near the end of their runway and won't all be able to raise

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Mark Suster · May 1, 2024

The existence of 1,500–1,600 private billion-dollar companies is incoherent when only 343 public software and internet companies in the US are worth a billion dollars

The entire public universe of billion-dollar software and internet companies, including Facebook, Google and Amazon, is only 343 — so the private count cannot reflect real value

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Harry Stebbings · Mar 19, 2025 · hedged

Pricing today does not feel meaningfully better; excessive excitement has not gone and the market has not returned to rationality and calm

Scope: acknowledges they may operate in different market segments

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Ed Sim · Oct 27, 2023 · hedged

Growth round valuations are down sharply on aggregate, but growth is not dead — there are pockets where investors still pay up, such as infrastructure companies going from $1M to $3-4M ARR raising at $250-400M

Carta data shows Series C valuations falling sharply, yet he still sees infra companies with strong forecasts raising at high early-growth prices

Scope: aggregate data shows growth taking a hit; specific valuation figures recalled approximately

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Peter Singlehurst · Mar 19, 2025

US Series C and later multiples are now below 2021 levels but still elevated

That is what the data shows

Scope: depends where you look

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Harry Stebbings · Sep 6, 2023

Large funding rounds are widely misreported: many are structured deals where only a fraction is priced at the headline valuation, and journalists don't understand this

He has seen European $100M rounds reported at $250M valuations where only $20M was actually priced and the rest was uncapped notes

Scope: cites European examples specifically

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Peter Singlehurst · Mar 19, 2025

Valuations in 2022 and 2023 remained too high, with convertible notes and structure used to pretend companies were still worth 2021 marks, so the right move was to deploy very little until quality businesses at good prices reappeared in 2024

Games were being played with structure so prices hadn't really reset; keeping the bar high and being patient is the discipline in limited-life funds

Scope: applies to traditional limited-life fund structures; recycling capital is possible in some of their funds

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Deven Parekh · Oct 11, 2023 · hedged

There is upside from today's software revenue multiples, but we are not going back to 20x revenue

2021 deals were underwritten assuming ~50% multiple contraction, which is roughly where multiples now sit; today's multiples are below the fifteen-year median but only by about 20%, not 40%

21:54 Modest upside exists in todays multiples but a return to peak 2021 levels is unlikely