How are Series A Multiple changing over time?

Michael HoMichael Ho • Following • FollowingSeries A prep for seed stage founders | former VC & exited founder | Click 'visit my website' to register for my next free Seed to Series A live training session 💪Series A prep for seed stage founders | former VC & exited founder | Click 'visit my website' to register for my next free Seed to Series A live training session 

How are Series A Multiples changing over time?
→ Let's look quarter by quarter from 2020 to 2024 👀

There are a couple of factors at play here:

1️⃣ The pre-money median valuations went from $28M in 2020 to a peak of $48M in Q1 2022 and are now sitting at $40M in Q2 2024

2️⃣ The pre-money multiples went from 10-20x in 2020 to a peak of 16-32x in Q1 2022 and are now back to the same 10-20x in Q1 2024

So why have valuations gone up, but the multiples stayed the same?

3️⃣ Because 2024 companies are generally further along than the 2020 cohort

4️⃣ It was common in 2020 for a Series A company to be doing between $1M to $2M ARR but now in 2024, it's more common to see $2M to $4M+ ARR

And we're also seeing the medium time from Seed to Series A going from 18 months in 2020 to 24 months now in 2024

So make sure you're clear on the milestones you need to unlock your Series A and make sure to stretch your seed capital to get you all the way there 💪

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