In 30 seconds
Loverro describes a sequence in which lower public-market multiples affect later and then earlier private funding rounds.
- 1Public pricesLoverro begins with public-market multiples.
- 2Later stagesHe expects pre-IPO investors to react first.
- 3Earlier stagesHe describes a slower effect on seed rounds.
Takeaways
- Public-market changes may precede private repricing.
- Later rounds may react before seed rounds.
- The timing is the investor’s historical interpretation.
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Public-market correction
In a 2023 interview, venture investor Tom Loverro describes how a public-market correction can eventually affect private startup valuations.
In a 2023 interview, venture investor Tom Loverro describes how a public-market correction can eventually affect private startup valuations.
He argues that investors in pre-IPO rounds react first when comparable public companies trade at lower revenue multiples, making earlier private prices less attractive.
The private-market lag
In his account, later-stage investors then lower prices, followed months later by earlier-stage investors as expectations flow backward through funding rounds.
In his account, later-stage investors then lower prices, followed months later by earlier-stage investors as expectations flow backward through funding rounds.
Loverro compares the lag to previous downturns, including the dot-com bust and financial crisis. His timing is a historical market interpretation, not a forecast of current prices.
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