• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Exclusive

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

An hour in the Oval Office with President Trump Fortune Editor-in-Chief: Alyson Shontell sat down with President Trump in the Oval Office for an hour. Tariffs, Intel, AI, Boeing, Iran—and the question every CEO eventually has to answer: who's next?

Memo to tech startups: If you want money, raise it now

By
Erin Griffith
Erin Griffith
Down Arrow Button Icon
By
Erin Griffith
Erin Griffith
Down Arrow Button Icon
April 18, 2014, 9:00 AM ET

FORTUNE — If it feels like every startup you’ve ever heard of is rushing to drum up large rounds of funding, that’s because they probably are. It’s hard to miss the string of massive rounds from recent months: Lyft raised $250 million from Alibaba Group and Third Point. Airbnb is raising $450 million to $500 million. Dropbox raised more than $500 million. Insight Venture Partners invested $250 million into Campaign Monitor.

Quora raised $80 million from Tiger Global Management. Squarespace just raised $40 million. Paperless Post raised $25 million. Betterment raised $32 million. Learnvest raised $28 million. Julep Beauty raised $30 million. Crittercism raised $30 million.

Beyond that, Blue Apron is raising $50 million at a $500 million valuation. Birchbox is raising $50 million at a nearly comparable valuation. Bonobos is raising a sizable new round. Automattic is raising between $100 million and $150 million.

MORE: This digital marketing startup is growing rapidly

Perhaps more meaningful than the news of each particular raise is the pattern they’re creating. Many of these companies know they’re going to need capital at some point this year. Many of them have been advised to raise now, because the market for big financings might not be so friendly in the coming quarters.

In short, startups are bulking up for a long 2014. They’ve read the headlines: Public tech stocks have had a volatile two weeks, peaking last week after a five-year-market rally.

The shrinking market caps of public tech stocks are expected to trickle down to private company valuations. This week, the Wall Street Journal reported that the selloff spells trouble for upcoming and recent tech IPOs. Bloomberg noted that the selloff was “restoring some rationalization” to the startup fundraising frenzy of late.

And the selloff in public tech stocks isn’t necessarily over, according to Fortune’s Steve Gandel. Their average price-to-earnings ratio of 18 is rich compared to that of the S&P 500, which has an average P/E ratio of 16.

Still, since the private market is sticky, it takes longer to adjust to falling valuations and investor fears, according to Deven Parekh, a managing director at Insight Venture Partners. “It takes prolonged volatility to make that happen,” he says. But he notes that startups are already hustling to get their rounds closed just in case.

“We are already seeing pressure on later-stage large rounds in a few sectors based on the shakiness of the public markets,” says David Pakman, a partner at Venrock. “Many of our later-stage companies are closing rounds quickly to gather as much capital as possible in case they need to weather an upcoming storm of uncertainty in the later-stage VC markets.”

MORE: Why investors are pouring millions into crowdfunding

Judging by the daily deluge of funding announcements (and the back channel of those in the works), the uneasiness hasn’t fully trickled down yet. In the meantime, companies are grabbing what they can.

“I think anyone who is invested in companies that need to raise big rounds this year should get it done now,” says Antonio Rodriguez of Matrix Partners. Mo Koyfman, a partner at Spark Capital, notes that good companies will always be able to raise money, but that “it’s always wise for companies to raise capital when the funding markets are good, as they have been recently, and to raise enough money so they can have the time to execute and withstand any potential downturns.”

Indeed, there’s a famous VC saying about raising money while the market’s hot.

Famous VC rule of thumb on financing: “The time to eat the hors d’oeuvres is when they’re being passed.”

— Bill Gurley (@bgurley) July 27, 2012

Right now, the market is hot. Venture funding in the first quarter of 2014 was at its highest level since 2001. But it might not be for much longer.

About the Author
By Erin Griffith
See full bioRight Arrow Button Icon

Latest in

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in

broker
Investingbubble
AI is eating the market and Wall Street strategists have bubble brain as they debate: are we in 1997 or 1999?
By Nick LichtenbergMay 18, 2026
33 minutes ago
Donald Trump smiles
LawDonald Trump
Trump creates $1.7 billion ‘Anti-Weaponization Fund’ to compensate allies as part of his IRS lawsuit settlement
By Fatima Hussein, Eric Tucker, Alanna Durkin Richer and The Associated PressMay 18, 2026
37 minutes ago
Women’s representation on boards of directors falls below 30%—but there’s one bright spot
NewslettersMPW Daily
Women’s representation on boards of directors falls below 30%—but there’s one bright spot
By Emma HinchliffeMay 18, 2026
56 minutes ago
Attendees sit to watch a speech during the 2023 Consensus conference in Austin, Texas
CryptoCryptocurrency
A strip club scandal at a major crypto industry event triggers sponsor backlash
By Jack KubinecMay 18, 2026
1 hour ago
data center
AIData centers
Communities are blocking billions in data centers. Big Tech has wagered $1 trillion otherwise
By Nick LichtenbergMay 18, 2026
1 hour ago
trump
EconomyCurrency
China will remain an ‘incomplete superpower’ until it can catch up with U.S. financial might, market veteran says
By Jason MaMay 18, 2026
2 hours ago

Most Popular

The top foreign holders of U.S. debt may soon dump Treasury bonds and bring their money back home, potentially spiking borrowing costs
Economy
The top foreign holders of U.S. debt may soon dump Treasury bonds and bring their money back home, potentially spiking borrowing costs
By Jason MaMay 17, 2026
1 day ago
Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
AI
Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
By Jake AngeloMay 16, 2026
2 days ago
The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
Politics
The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
By Jake AngeloMay 12, 2026
6 days ago
'No one was coming to save me': How Reese Witherspoon built a $900 million company from a problem Hollywood wouldn't fix
Success
'No one was coming to save me': How Reese Witherspoon built a $900 million company from a problem Hollywood wouldn't fix
By Sydney LakeMay 17, 2026
1 day ago
SpaceX heads into a record-shattering IPO with the 'deepest moat that exists today' as investors vow to 'never bet against Elon'
Innovation
SpaceX heads into a record-shattering IPO with the 'deepest moat that exists today' as investors vow to 'never bet against Elon'
By Jason MaMay 16, 2026
2 days ago
Gen X is the most indebted generation in America. Their employers can fix that
Commentary
Gen X is the most indebted generation in America. Their employers can fix that
By Mary MorelandMay 17, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.