Startups could suffer deep cuts soon as investors re-rate and re-price

THE bloodletting in tech stocks and cryptocurrencies is starting to spill over into private markets, and startups could soon feel deep cuts as investors pull back hard on funding, valuations, and exits.

Investors are growing nervous about pricing their mid-to-late stage startups after years of record valuations and seemingly unlimited funding. And while waves of capital were still sloshing about in 2021, the tide is likely to reverse and contract.

“You don’t want to get into a company at a particular price and then it’s half the price in 6 months’ time. There’s a lot more caution in the market and many growth investors are talking privately about a slowdown in the investment velocity,” said Tushar Roy, partner at venture capital firm Square Peg Capital.