Today I would love to share a very useful report.
Such companies like Pitchbook, Crunchbase, and Dealroom calculate the average deal size, valuation, and other different indexes.
And Stonks, together with Forum Ventures, decided to collect near-real-time data for 22Q4.
As you might know, there is dramatically little data for pre-seed and seed, so the most delicious part is that they focused on pre-seed and seed stages.
So, Kudos to Michael Cardamone, the CEO of Forum Ventures, and Director of Research at Stonks Tom White.
For this report, they interviewed over 80 investors about the deals they made in 22Q4, with a total of 124 deals data collected.
The numbers from their data are the following:
We can divide startups into three groups:
- Pre-revenue: median estimate $9M with $9.7M on average. You can see in their table numbers $10M/$10.7M, but in the text, they have this value. I believe in a table there is a typo.
- 0-$250K ARR: the median is quite close to the previous: $10M, but the average is $13M.
- $250K+ ARR: the median is $16M, an average of almost $20M.
| Traction | # Of Deals | Median Valuation | Average Valuation |
|---|---|---|---|
| Pre-Revenue | 48 | $9M | $9.7M |
| 0-$250K ARR | 30 | $10M | $13M |
| $250K+ ARR | 33 | $16M | $19.8M |
While looking into startups deeper, you can get these numbers:
- pre-revenue startups had deals with $15-31M valuations, however, 80% of startups had valuations below $11M.
- $250K+ ARR startups in 27% had deals with valuations below $11M.
- $14M is the average valuation for all 124 startups. This includes a web3 startup with a valuation of $55M. If do not include it, then the average valuation drops to $9.5M.
- 27% of the entire startups got a valuation below $10M, and 26% of the entire startups got a valuation above $20M.
The strange to me is a valuation of pre-revenue and 0-$250K is almost the same.
There is also interesting information:
- 58% of investors expect a decrease in valuations in 23Q1.
- 38% of investors expect valuations at the same level.
- Only 4% believe that ratings will rise.
- The average number of investments made in the last 2 quarters since the market turned was 2.
- According to the chart, about 40% of investors expect a drop in investments in 32Q1.
- And finally shocking data: according to TechCrunch, in 22Q3, women raised around 1.9% of all venture capital allocated (down from 2.4% in 2021).
Top 3 industries of the companies invested in:
- 20% for Fintech
- 11% for Future of Work
- 13% for Healthtech
The top three geographic areas represented in this data set were:
- 29% for Bay Area
- 22% for NYC
- 36% for Other
Since this report covers only US here you can see cities.
It’s pretty awesome to see such very data collected.
It makes you a better understanding of the current state of early-stage startup valuations and the prospects for the coming quarter ahead or even longer.
We also attached the report to this article.