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The Startup M&A Market Fell 94% Year over Year - But One Segment is Thriving

Tom Tunguz

The US startup M&A market in Q4 2022 was one of the quietest in the last 20 years. During a down-market, young startups who face a radically more challenging fundraising market than six months ago more often choose a quick sale. It rivals the dotcom bust & Global Financial Crisis for its paucity. in Q4 2021 to a paltry $2.1b

Startup 327
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Dear SaaStr: If So Many Startups Fail, Why Does Everyone Want to Do Them?

SaaStr

Folks want to start startups because they have a chance to look like this: The true definition of a tech startup is probably one that if it truly achieves product-market fit, can scale almost infinitely. In 2014, it had 6 employees. That’s the biggest difference between a small business and a classic tech startup.

Startup 279
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Inflation and Deflation in Web2 and Web3 Startups

Tom Tunguz

Before a startup is founded, no stock exists. The startup can inflate share count by creating shares. By the time it’s public, more than 100m shares exist across hundreds of shareholders (employees, institutional investors, retail investors). Conversely, the company can deflate share count by buying shares and destroying them.

Startup 318
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The Best Time of Year to Raise for Your Startup

Tom Tunguz

I set out to determine if fundraising seasonality had changed from this post I published in 2014 which suggested Q2 & Q4 were best for founders. The US software Series A market has become much less seasonal since that post in 2014. The answer is yes. I’ve plotted the data above & smoothed it to clarify the patterns.

Startup 292
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Do SaaS Startups Still Require Less Capital than 10 Years Ago?

Tom Tunguz

In 2014, I published a post called Do Startup Require Less Capital to Succeed than 10 Years Ago ? In 2014 we saw increasing efficiencies over time, which was very exciting because it reaffirmed the efficiency of SaaS go-to-market. Startups going public from 2006-2009 showed a median ROIC of 0.42. of revenue at IPO.

Startup 279
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How Will the 52% Correction in the Stock Market Impact the Startup Fundraising Market?

Tom Tunguz

2014’s correction stalled and then reversed Series D round sizes for 2 years through the second correction in 2016. Three corrections in the last ten years have contracted multiples by 40% or more. These are marked in peachpuff orange rectangles above. The Series D mean round size is plotted in red.

Marketing 362
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Series A SaaS Startup Benchmarks for 2018

Tom Tunguz

First, the science of building SaaS companies is better understood today than in 2014. More money enables startups to achieve greater milestones before raising the next round. To be fair, 22% of companies raised at $0 in ARR. But the average MRR has increased substantially from the last time I analyzed the data.