We’re seeing more of the aftermath of the go-go days of 2021 play out, as startups have been parting with their assets in fire sales this summer. But the trend of startups selling off units of their businesses (or themselves entirely) will likely pick up from here, and could prove an opportunity for healthier companies to beef up.
That’s the thesis of one venture investor I chatted with last week. They told me they see this as a perfect storm of zombie companies that raised too much money at unrealistic valuations in recent years—and found themselves stuck with business models that don't make sense anymore in this tougher environment. "I think a lot of active board members are basically having honest conversations with founders and saying, 'Hey, even if you really execute over the next three years, you're just gonna get back to, like, half the valuation you're at today…and even then it might be difficult to raise,’" they told me. The VC said they've noticed these asset sales more in the past two months.
