Startup Valuations Dropped 24% in Q4

VCs commonly note that it takes longer for valuations to correct among private companies than among public ones. But the lag-time might not be that long, judging by fourth quarter data from Angelsoft, a software company that tracks valuation trends.

Today, the company reported that valuations for funded startups in Q4 of 2008 fell by 24% when compared to Q3 of the same year. The company’s software, which is used by more than 450 angel groups and venture funds worldwide, tracked a total of 128 deals in the quarter with a median pre-money valuation of $3 million. In the third quarter, it tracked 123 deals with a median value of $3.9 million.

Angelsoft says the Q4 numbers represent the largest quarter-to-quarter drop in the 4 years that it has been tracking company valuations.

However, there was some encouraging news embedded in the numbers, according to Ryan Janssen, Angelsoft’s COO. He called it “damn near a miracle” that angels and vcs actually did more deals on its platform last quarter than in the prior one.

Find new deal opportunities, super-charge your fundraising efforts and track top managers with VCJ. Get your FREE trial! Or subscribe now

Sign up to our Newsletter

Receive updates from our PE HUB Wire and Top Stories of the Week newsletters:

We will not send you spam, and we don't share your email address with 3rd parties.