VC investors are 'open for business' after a summer slowdown for deals

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VCs are itching to get back to dealmaking, but tell founders to brace for lower valuations and a longer wait for funding

Investors are returning from Labor Day ready to fund startups at bargain prices. It was a chillier summer than most — for startups, that is.

, which has stakes in Alloy and K Health, said he worried when a couple of portfolio companies went out to raise new funds in the past 30 days. To his surprise, those deals are now closing with"very favorable" terms.

He's seeing startups raise Series A and Series B rounds at valuations that are 30% to 40% lower than what similar companies sought last year. That means his firm can make more investments, because companies are pricing their shares for less. "They might not like the valuation they'd get if they did it right now," Ghaffary said, speaking generally about startups raising money and not about his portfolio companies.In the first half of this year, venture firms raised a staggeringin new funds — the highest amount over a six-month period for the industry — Sunita Patel, the chief business-development officer at Silicon Valley Bank, said.

 

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