And I’ve heard that raising money these days is way harder than it was raising money before.” “I’ve had founder friends who have term sheets that got renegotiated, where the investor came back and asked for a 25 to 40 percent haircut on the valuation. I personally know of it,” the founder said. “I’ve heard of founder friends of mine who have had term sheets pulled. The market conditions have changed dramatically in a span of weeks, he added. “Even if we had been two or three weeks later to enter the market, it would’ve been different for sure,” the founder said. While the lead investor, a deep-pocketed firm, didn’t seem fazed, it wasn’t the same sentiment from other VCs they reached out to, who were feeling some pressure from their LPs. But two weeks later when Russia invaded Ukraine, company executives felt nervous that term sheets could be pulled and reached out to investors. The sales startup founder raised the company’s Series B round without issues, receiving five term sheets from seven investors it talked to. That’s true of the companies trying to raise money from VCs, and VCs trying to raise money from LPs, the founder said. (The founder asked to remain anonymous as the round hasn’t been announced yet.) ![]() And this is the sector of behavioral health, which is supposed to be the hottest sector of the moment.” Investors, startups cautious on spendingĪnyone who hasn’t raised money in the last year or so is “out on the street trying to raise,” according to another founder, whose startup is in the sales space and recently raised a Series B round. The founder continued: “They’re sitting on their capital and waiting to see what happens. It’s frustrating “to go from that kind of feast to famine for circumstances that are completely out of your control and recognizably important…there are a lot of people who were formerly really excited to talk and to lead on the Series A who are rethinking their investment strategy just at the moment,” the founder said. Just a few months ago, the company would get at least one email a week from an investor trying to set up a meeting but that pace has gone down also, the founder said. The healthcare startup founder noted that inbound outreach from investors has dipped as well. “It’s like these barriers have been put into place that didn’t exist three months ago to slow things down.” “I can’t tell you exactly what they’re thinking because I’m still trying to figure it out myself, but it’s the due diligence process that has gotten exponentially longer and with more questions and more hurdles,” the founder said. Diligence requests and questions from investors are also more granular than before. Since then, the tone has changed and the speed at which investors are moving has slowed. ![]() ![]() The “top three” conversations with investors three months ago were moving very quickly, and the company hoped to close the raise by the end of June, the founder said. ![]() The founder asked to remain anonymous as fundraising continues. One founder of a startup in the healthcare space that’s attempting to raise a Series A round said the environment had changed “radically” in the last six months. That means more due diligence, less inbound interest, and fewer crossover investors. While their experiences differ, they agreed that the landscape has shifted in recent months. I chatted with a few founders who raised money recently or were in the process of raising money.
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