The Rise and Fall of Tech Startups: From Success to Zombie Companies

While early-stage startups are seeing stronger valuations and smaller declines in total capital availability, late-stage investment has been in retreat, leading to a misconception that the startup ecosystem as a whole is struggling. Data from Carta shows that seed-stage startups have only experienced a 58% decline in capital raised in Q3 2023 compared to Q4 2021, while Series A, B, and C rounds have all seen declines of 80% or more. This challenges the notion that startups should stay private for as long as possible, suggesting that an early path to an IPO may be more beneficial.