# The Post-Crash Venture Capital Landscape New normal in startup valuations and investor strategies - **Source:** [Both Sides of the Table](https://bothsidesofthetable.com) - **Published:** 2022-09-15 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/148224a6-de0a-4a98-9c1b-b216a1fc808c ## Magnitude of the Market Crash Public company valuations dropped 53-79% between 2019-2022. Upfront Ventures and Morgan Stanley analysis suggests this isn't a temporary correction but a new normal. SaaS companies are expected to revert from 24x to 10x revenue multiples. ## Impact on Private Markets Public market declines take 6-24 months to reflect in private markets. Valuation resets appear inevitable across all stages from late-stage to seed rounds. The artificially high valuations of 2021 are unsustainable in the current climate. ## Historical Perspective Early-stage startup valuations tripled from $20M to $60M average in 5 years, with many exceeding $100M. However, permanent multiple compression at exit points makes these levels unrealistic going forward. ## Dry Powder Waiting $290B in VC funds awaits deployment in US startups. Investors now prefer companies with 2019-2020 vintage over those clinging to 2021 valuation expectations. Patient capital deployment becomes crucial. ## Two Core Strategies VCs face a choice: super scaling or super focusing. Firms like Upfront choose the latter, targeting $2-3.5M seed investments for 20% ownership in niche domains. Disciplined focus proves critical in turbulent times. ## Valuation Discipline VCs avoiding trendy areas like NFTs double down on deep due diligence in their expertise zones. While analysis timelines shortened from 2009 to 2021, the core strategy remained: staying in known waters. ## Investor 'Edge' Successful VCs maintain either unique investment theses or access advantages. Upfront emphasizes that deep domain knowledge and networks in focused areas become survival tools during market corrections. ## New Market Realities When the music stops, truths emerge. After a 12-year bull market, VCs must generate returns in all conditions. Disciplined focus and realistic valuations will define success in this new era of venture capital. ## Sources covering this story - https://bothsidesofthetable.com/what-does-the-post-crash-vc-market-look-like-ed81cd884021?source=rss----97f98e5df342---4 — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._