Unique Research · Company / Funding · December 18, 2024
Earlier this year IVP partner Tom Loverro declared the post-pandemic downturn over — survivors should prioritize growth over cost-cutting.
Tribeca Venture Partners co-founder Brian Hirsch tells a different story: thousands of companies still struggle to raise the next round at higher valuations — or simply to survive.
The 13-year-old firm runs a late-stage strategy unlike classic growth funds: it invests in companies forced to raise at flat or lower valuations than the prior round. Hirsch told TechCrunch that existing investors are often ready to put in more capital but need a third party like Tribeca to price the deal.
VCs rush to back soaring AI valuations — “but everything else is really struggling,” Hirsch said.
Carta’s latest valuation data makes the two-world market plain. Across nearly 2,000 deals this year, the bottom 10% of Series B companies had a pre-money of just $40 million; the top 10% at the same stage approached $1 billion. Series D spreads were wilder still: $27 million to $5.2 billion.
Those high marks are AI: ElevenLabs’ Series B earlier this year at $920M pre; Cohere’s Series D at $5B pre.
For non-AI startups the climate is different — even for those that raised after the ZIRP frenzy ended. Hirsch: non-AI companies that closed Series A 18 months ago can struggle to win a B even with decent revenue growth. Non-GenAI founders can feel like “the kid not invited to the cool high-school party” — solid businesses, little attention.
Carta: only 9% of Series A companies reach Series B within two years — down from ~25% before.
Tribeca’s growth fund helps more mature startups (typically $20M+ revenue) price the next round. Many grow well but are overvalued for today’s market. “We’re still in the adjustment phase,” Hirsch said. “We think it takes at least another year or two to clean up the mess.”
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