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VCs on how to ‘survive and thrive’ after a down round
Founders hope that their startups continually raise larger funding rounds at escalating valuations. But unexpected challenges, such as a global health
While founders and investors generally try hard to avoid down rounds, contrary to popular belief, these deals don’t necessarily have a devastating impact on a startup’s future. “Our first investment, when we started our firm in 2021, was a down round recap of a company that had to have a total pivot during COVID,” Nikhil Basu Trivedi, co-founder of Footwork, said onstage at TechCrunch Disrupt 2024. Startup prices dropped significantly after the U.S. Fed hiked interest rates, and many companies remain overvalued relative to their performance, said Dayna Grayson, co-founder at Construct Capital.
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