Down rounds on the up

In Q1, 7.5% of all US VC funding rounds were down rounds, says PitchBook.

Because of the negative connotations of a down round companies have taken on debt to raise cash.

More than 400 companies — one-third of all unicorns — haven’t raised new funding since 2021, says PitchBook, which is unusual because most  VC-backed  companies raise money every year or two.

This is putting pressure on the cash flow of unicorns of which 94% are unprofitable according to PitchBook.

Overall, the number of  startups that raised money in the first quarter of 2023 was at its lowest level in five years.

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