Down Round Related Topics 
Both Sides of the Table
MAY 5, 2013
. “Whenever I hear advice about pricing a round too high for the next round, I can’t help but think: well, if the choice (ceteris paribus) is between. I would love it if other people would weigh in on the comments section below if you’ve had experiences with down rounds. A down round.
Both Sides of the Table
JULY 29, 2010
The A round was done in February 2000 (end of the bull market) and my B round was done in April 2001 (bear market). As a result I had to do a down round. Down rounds are psychologically really difficult on companies and can make it harder to do later rounds. I eventually needed more money.
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Both Sides of the Table
JUNE 30, 2016
And if you raise the “5 on 20” and don’t grow into your next-round valuation you’re stuck because venture investors HATE doing down rounds. The data suggests that the investors have a much easier time hitting a $100–200 million outcome than a $400–500 million outcome so it’s easier to commit at lower prices.
Both Sides of the Table
JUNE 5, 2011
Even if you have an interesting story to tell most investors won’t want to go through the brain damage of doing a “ down round ,&# which creates tension between them and early investors. They get a cheaper price, they wipe out much founder stock value and they reissue you new options.
Both Sides of the Table
SEPTEMBER 28, 2014
Simply put – down rounds are very hard to achieve psychologically because insiders fight against them (rightly or wrongly) and outsiders have a mental gap that if your valuation is going down your company is forked up and they often just pass.
Both Sides of the Table
SEPTEMBER 18, 2014
And now I have to explain to team that they’re taking more dilution than they expected if we do a down round. A down round? Raising lower seems kind of like something is wrong. Me: More dilution? I thought it was a convertible note with a cap? Didn’t you consider that raising at $8 million was a possibility?
Both Sides of the Table
MAY 30, 2018
Of course valuation is in the eye of the beholder but if that VC thinks your last round valuation was way too high then he or she is more likely to politely pass rather than try and talk down your valuation now. VCs hate “down rounds” and many don’t even like “flat rounds.” There are some simple reasons.
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