At the 500 Startups PreMoney Conference in June, LP investor Fred Guiffrida of Horsley Bridge had this to say about evaluating VC funds:
[Tweet “Don’t confuse brains with a bull market”]
And while the IPO markets may look tame compared to the heady dotcom days by pure quantity, VC-backed tech company exit valuations globally continue to climb. According to CB Insights valuation data, aggregate exit valuation for global venture capital-backed tech exits has seen a huge step-up from recent quarters, hitting $52.8 billion in Q2 2014. Compared to the same quarter last year, aggregate tech exit valuations for VC-backed companies have jumped over 367%. Of note, the valuation jump in Q2 was largely driven by international exits including JD.com, Jumei and Just-Eat.
The chart below highlights the aggregate exit valuation of global tech exits since the start of 2013 by quarter. While aggregate exit valuation has bumped up in a big way, it’s worth remembering that most venture-backed startup exits are smallerthan the headline-grabbing home runs.
Of course, whether this run up is the result of brains or a bull market is something we’ll let you decide.