Communications of the ACM
Hottest Silicon Valley Startups Begin to Sell Themselves at a Discount
As one of Silicon Valley's hottest startups, Confluent expected to double in value when it began pitching investors for new funding earlier this year.
The data management company's plans hit a bump following a coronavirus-led stock market decline. The company, which had sought a $5 billion valuation, instead settled for a $4.5 billion estimate following negotiations with the tech investor Coatue Management.
The recalibration reflects the increasing caution in Silicon Valley in the wake of the coronavirus crisis. Company founders are having to accept tougher terms. Many start-ups that were recently turning away would-be investors are now announcing deep job cuts and spending freezes.
"At least for the short term, gone are the days where it is a founder's world," says Rachel Proffitt, a partner at the Silicon Valley-based law firm Cooley. "That is going to be a little bit of a stark reality for the current generation of young entrepreneurs."
From The Financial Times
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