In Q1, 7.5% of all US VC funding rounds were down rounds, says PitchBook.
Because of the negative connotations of a down round companies have taken on debt to raise cash.
More than 400 companies — one-third of all unicorns — haven’t raised new funding since 2021, says PitchBook, which is unusual because most VC-backed companies raise money every year or two.
This is putting pressure on the cash flow of unicorns of which 94% are unprofitable according to PitchBook.
Overall, the number of startups that raised money in the first quarter of 2023 was at its lowest level in five years.
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