Guest Bio:

Peter Walker runs the Insights team at Carta, focused on discovering key data and narratives across the private capital ecosystem. In a former life, he was a marketing executive for a media analytics startup and led the data visualization team at the Covid Tracking Project.

Carta is an equity management software platform that provides services for private companies, public companies, and investors to manage their cap tables, valuations, investments, and equity plans. The platform is designed to help these stakeholders map and expand the global ownership network, aiming to increase liquidity and transparency between them. Carta manages over $800 billion in equity for more than 43,000 companies including notable names like Robinhood, Tilray, and 500 Startups.

Episode Summary:

The conversation discusses data from Carta, a platform with 43,000 startups, including 11,000 pre-seed companies. The data shows the average and median valuations, cash raises, and dilution for different funding rounds. It highlights the importance of dilution and the potential risk of giving up more of the company than expected when raising multiple rounds on safes. The conversation also touches on the trust and relationship dynamics in venture capital, the differences in fundraising practices across regions, and the impact of Y Combinator on valuations. The conversation explores the dynamics of fundraising in different cities and the role of local money in startup ecosystems. It highlights the fact that a significant percentage of capital invested in local startups comes from outside the city or even outside the state. The conversation also touches on the impact of AI on company valuations and the potential hollowing out of the middle part of the venture market. It concludes with a discussion on the changing perception of IPOs and the role of regulators in making the public market more accessible.

Key Takeaways:

• Carta has data on 43,000 startups, including 11,000 pre-seed companies.

• Dilution is an important factor to consider when raising multiple rounds on safes.

• Trust and relationships play a significant role in venture capital.

• Valuations and fundraising practices vary across different regions.

• Y Combinator has an impact on valuations and accelerates companies to the seed stage. A significant percentage of capital invested in local startups comes from outside the city or state.

• The dynamics of fundraising vary across different cities and ecosystems.

• The rise of AI may lead to a decrease in the amount of capital needed to achieve venture-scale outcomes.

• The private market may become more accessible before regulators make the public market easier for startups.

• The perception of IPOs as a positive signal may change, and going public may be seen as a last resort rather than a desirable outcome.

Video Chapters:

Time markers are clickable in the YouTube description here.

• 00:00 The Importance of Reps in Content Creation

• 01:34 Understanding the Data Source

• 07:26 Dilution and Fundraising Rounds

• 11:29 The Role of Safes in Fundraising

• 18:28 Legal Considerations in Fundraising

• 22:23 The Impact of Y Combinator

• 23:26 Geographic Differences in Fundraising

• 24:43 Weighting of Data

• 25:48 Regional Differences

• 26:55 Capital Investment by City

• 27:57 Impact of Silicon Valley

• 28:55 Valuation and Negotiation

• 30:03 Founder Profile and Valuation

• 30:38 Negotiating Leverage

• 31:31 Impact of AI on Financing

• 32:42 Venture Capital Market Dynamics

• 36:42 Changes in the Venture Market

• 37:32 Rise of Safes

• 37:58 Economics of Seed Rounds

• 38:57 Competition and Quality of Companies

• 39:43 Impact of Decreased Funding

• 40:49 Impact of AI on Financing

• 41:42 Hollowing Out of the Venture Market

• 43:36 Negative Signal of IPOs

• 44:42 Regulatory Response to IPOs

• 45:50 Private Markets vs Public Markets

• 47:55 Future of Venture Capital

• 50:31 Regulatory Impact on IPOs

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