Context:
I’ve been in enough late-stage fundraising conversations to know the quiet part everyone’s thinking but rarely says out loud: nobody in bulge bracket venture really wants to price things. The big funds don’t want to do the hard work of figuring out what a company is actually worth in this market. Instead, they’re looking for a simple justification to pay 3-5x more than the last round. The logic? “Well, the last group paid $X, and now the company’s bigger, so I’ll pay $3X (or $5X).” That’s the game.
Market Signal:
This is a signal about how risk is being managed (or avoided) at the top of the venture stack. Rather than price discovery or real diligence, we’re seeing a herd mentality: “Just show me the evidence to justify a markup, and I’m in.” This is as much about optics as it is about fundamentals.
Takeaways:
If you’re a founder, internalize this: your next round’s price is anchored to your last round’s price. The burden is on you to make the markup easy to justify.
Don’t just talk about growth—bring receipts. Show the metrics, milestones, and market shifts that make a 3x+ step-up look obvious.
If you’re an investor or operator, recognize that this dynamic creates both opportunities (for those who can break the pattern) and risks (for those who follow it blindly).