Silicon Valley start-ups brace for a summer of pain

By Lizette Chapman

24 Apr 2023 · 3 min read

Editor's Note

Venture-capital investing in start-ups has fallen precipitously. Founders are learning that agreeing to lower valuations—or "down rounds"—is better than getting no funding at all, Bloomberg reports.

The start-up world has had a tough year - plagued by mass layoffs, plummeting venture capital investment and the chaotic collapse of Silicon Valley Bank. But many in tech believe that the worst is yet to come.

As the market downturn drags on and investor cash remains hard to come by, more start-ups will start to run out of money, experts say. Some venture-backed companies will be forced to raise new funding even if it means agreeing to a lower valuation than they once secured, a deal called a down round, dreaded by founders and investors alike.

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