What the numbers say: VC firms, such as Andreessen Horowitz, Bain Capital Ventures, Bessemer Venture Partners, and Kleiner Perkins, are tapping into the secondary market to scoop up shares in promising startups at a discount, per Bloomberg. The situation was different until a year ago when hedge funds and VCs "would shun the secondary market," per EquityZen founder Phil Haslett. Relevance: VC firm Accel is using the opportunity to scoop up stakes in promising existing portfolio companies, including cloud-computing startup Vercel and developer software maker Sentry. Coatue acquired $700M worth of shares in security software maker OneTrust. What happened: According to a Forge Global report, shares of startups were trading at a median discount of 61% compared to their peak valuations. New York-based investment firm Liberty Street Advisors acquired stakes at a 30% to 50% discount over the last priced round. The fundraising slump, economic headwinds, and lack of exit options are forcing cash-strapped founders, employees, and investors to accept lower valuations. |
