Thread by @dunkhippo33

Today's tweet thread will share some data that we've collected @HustleFundVC about the startup landscape that we shared at our LP mtg in April.

What did valuations look like last year? How do they differ by geo?

Thanks to @will_bricker for pulling this together!

Read on >>

1) The red line represents the median valuation that founders *asked for* when applying to Hustle Fund.

You can see that last summer during COVID, valuations that ppl were requesting took a real dive.

2) I often say that valuations are not about progress or traction but are about supply and demand. Supply of your fundraising round and demand from investors.

The companies who were applying last summer were not any "worse" than usual -- the market of investors simply dropped.

3) The blue bars show you how active we at Hustle Fund were during COVID. In fact, last summer, we were quite busy doing 12 new deals per month!

When other investors stopped investing, we leaned in.

4) How do valuations break down by geo? This box and whisker plot shows the 25%-75% range of valuation requests (when ppl apply to Hustle Fund).

In the US, you can see this range was $2.5m-$7m post in 2020. In 2021 (until Apr), that range has extended from $2m-$7.5m post.

5) Intuitively, we see this and feel this. Deals that are hot are really hot this year. Valuations for these deals are higher than before.

But the flip side is also true. What we are seeing here is a real bifurcation of valuations and fundraises.

6) We see some bifurcation happening in Canada as well.

But not at all in Southeast Asia. In fact, nothing has really changed about fundraising in SEA between last year and this year.

7) It's impossible to say what is causation or correlation, but I speculate that COVID had a massive effect on the US & Canadian fundraising landscapes today.

Investors who didn't invest last summer have been catching up on the deals they didn't do. This drives up valuations.

8) But in SEA, where COVID didn't have nearly as much of an impact on business and for the most part, business was usual, there's no "catch up".

So nothing changed.

9) This begs the question whether this bifurcation of valuations is going to continue in the US and CAN? When investors are "done catching up", are they going to pare back their investing?

My hunch is yes. It's just a matter of when.

10) What geos have we been investing in @HustleFundVC (through Apr 21)?

The majority of our investments are still in the US (green), but that has been decreasing over time.

Our Canadian investing (orange) went down during COVID (but we're eager to ramp that back up)

11) Our Southeast Asian investments (blue) have stayed constant since the start of 2020.

Notably, we've been doing a quite a few investments in LatAm & Africa this year (red). This is something we'll slowly ramp up over time. Big thanks to @mariarotilu & @claire for guiding us.

12) Lastly, all of this is based on the data that we have to work with which is approx n = 600 per month, which is a small sample set of the broader data out there, but this data seems to represent what we are intuitively seeing.

Thanks again @will_bricker!