The average late-stage valuation in 2020 is currently $240.0 million higher than 2019. Elevated dry powder levels and record mega-deal activity helped drive this figure. It should also be noted how active nontraditionals have been at this stage. The median late-stage valuation of rounds with nontraditional investment sits at $140.0 million in 2020, more than $100 million above deals without nontraditional involvement.

Proportion of down rounds falls after spike in Q2. After the percentage of down rounds moved to 13.6% in the second quarter, we anticipated we might see a sustained increase in down rounds due to the pandemic. Measures that startups have taken to slow their burn rate or extend capital runway, such as venture debt, could cause a resurgence of down rounds in the next few quarters as companies still struggling with the impact of the pandemic exhaust other options and are forced to raise a new VC round.

The lower end of the venture lifecycle—namely, angel and seed-stage investments—saw mixed results even as public markets rallied in Q3. Angel investments saw a sharp contraction in pre-money valuations as a rise in equity ownership stakes occurred. Meanwhile, the median seed-stage valuation has remained steady through 2020, with slight upticks observed in the bottom and top quartiles.

IPOs flourish, acquisition valuations stutter. Q3’s flood of large tech IPOs drove improvement in the exit valuation statistics on both an absolute and step-up basis. However, acquisitions have seen more negative results as the 2020 median and average acquisition valuations are essentially flat to their 2019 values, with the 25th percentile showing a 19.8% YoY decline.