Corporate & Securities Law

Series A Pre-Money Valuations Down 25 to 50 Percent

By Ryan Roberts

Connie Loizos of Private Equity Hub interviewed Bob Ackerman, co-founder of Allegis Capital, regarding the current state of the VC industry. Ackerman made a few quasi-dire statements for both startups seeking capital and firms looking to provide capital, most notably:

In response to the current state of Series A pre-money valuations, Ackerman said:

Depending on the situation, you?re seeing pre-money valuations come down from 25 percent to 50 percent [for Series A deals].

According to Ackerman, there’s bad news for those you planning a Series B or C deal:

Bs and Cs have collapsed entirely because the capital in the pipeline isn?t moving.

And finally, Ackerman made a prediction about the future of the venture capital industry:

[F]rankly a lot of VCs are going out business ? I?d say 25 percent of them will disappear.

Read the full interview here.

Full post as published by The Startup Lawyer on December 09, 2008 (boomark / email).