But the rise in valuations has only increased in the last year. In 2018, the median corporate valuation for a mature start-up category more than doubled, from $ 183 million in 2017 to $ 420 million, according to Carta, a provider of software and assessment services. And in a study conducted in 2017 by the National Bureau of Economic Research among 135 new unicorn companies, researchers concluded that companies were overvalued by an average of 50 percent.
"There is too much warmth around good, not necessarily good, old companies," said Mamoon Hamid, partner of venture capital firm Kleiner Perkins. Even a "good, not excellent" company that he recently met had 13 investment offers, he said. The result: Kleiner did not invest.
Greg Sands, managing partner at Costanoa Ventures, said his company had abandoned three investments in 2018 when the price was 30% higher than what he was willing to pay, an increase over previous years. It also eliminated many companies that were asking for more money than what seemed reasonable – but some of them then collected triple that amount from other investors.
"What is happening now is not sustainable and will not last forever. It can not, he says. Costanoa has raised a $ 75 million opportunity fund, which Sands says would give him the ability to close more deals when the market gets colder.
Many other venture capital firms are also able to become more aggressive in the event of a market downturn. According to PitchBook, the data provider, private equity funds raised $ 30.2 billion in the first three quarters of last year, surpassing the total of $ 35.3 billion recorded in 2017.
The founders of start-ups also seem to be preparing for a possible transfer of fortune. In a study conducted in late 2011 by First Round Capital, a venture capital firm, just under half of the 529 entrepreneurs said they would expect fundraising to become more difficult in 2019. One-third believed that the tech bubble was about to open. Increase of 10 points compared to 2017.
According to Kirsten Green, managing partner of Forerunner Ventures, some start-ups are raising more money to deal with uncertainty. Others create contingency plans to reduce costs so that their survival does not depend on new funding.