The deal terms for unicorn investment rounds are less about company fundamentals, and more about the scarcity of great startups.
There's more money than there are good deals in Silicon Valley, so later stage investors are forced to offer more money for less equity in order to beat other term sheets. This ends up looking like sky-high valuations, since investors that offer fair-market-valuations are unlikely to get picked. Founders naturally gravitate towards minimizing dilution.
There's more money than there are good deals in Silicon Valley, so later stage investors are forced to offer more money for less equity in order to beat other term sheets. This ends up looking like sky-high valuations, since investors that offer fair-market-valuations are unlikely to get picked. Founders naturally gravitate towards minimizing dilution.