Are rising early stage valuations a poisoned gift for startups?

Compared to a year ago, startup valuations have fallen across the board, whether you’re a startup raising a seed round or a Series E.

But there’s good news if you’re a growth-stage startup: According to data from CB Insights, valuations for startups that raised Series A, B, and C rounds around the world were higher in the first quarter of 2023 than in the fourth quarter of 2022.

That said, things don’t look good for early and late stage deals: valuations for angel, seed, Series D rounds and later rounds are on a downward trend globally.

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In the United States, however, PitchBook data paints a different picture, one that simultaneously confuses and fascinates: Early-stage valuations have climbed higher, while Series A, B, C and later-stage deals are now worth less.

It seems that startup trends in the US are different from the rest of the world: what goes up in the US goes down elsewhere and vice versa.

This dissonance is interesting, but today we’re going to explore a question that’s even more intriguing. If we continue to see valuations rise for startups that raise seed rounds as later stage prices fall, how long will it be before the journey from seed to Series A becomes one where companies lose value?

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