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US VC Valuations Report

Q1 2023

US VC Valuations Report

May 10, 2023

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US VC valuations extend slump as down rounds creep up in Q1

Venture capital valuations continued their descent in Q1. The dearth of IPO exits, a pullback from nontraditional investors, and ongoing economic headwinds have all contributed to lower valuations and smaller round sizes for all stages except seed.

Not only did valuations drop, but the share of down rounds as a percentage of all deals began to creep higher, according to our Q1 2023 US VC Valuations Report, sponsored by Morgan Stanley At Work. We estimate the market environment has become the most investor-friendly in nearly a decade, leading us to believe we are not yet at the bottom.

Takeaways include:
  • Pressures from a lack of capital availability also trickled down to earlier stages of the venture ecosystem.
  • The median deal size for late-stage rounds fell 25% to $6 million, the lowest figure we’ve observed since Q2 2017.
  • Pre-money valuations for venture-growth-stage companies fell to a median of $90 million, a 74.6% decline from the 2021 full-year record high of $355 million.

Table of contents
Key takeaways 4
Angel and seed 5
Early-stage VC valuations 7
Late-stage VC valuations 9
A word from Morgan Stanley At Work 11
Venture-growth valuations 13
Deals by sector: agtech 15
Deals by sector: infosec 17
Nontraditional investors 19
Liquidity 21
Deal terms 23