Jul 27, 2023 · 24m · saastr
Raising Capital in 2023: What You Really Need To Know with Creandum Partner Peter Specht
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this presentation, Creandum Partner Peter Specht delivers a data-driven analysis of the 2023 venture capital landscape, explaining how valuations and ARR benchmarks have normalized back to historical 2020 levels. He outlines key metrics for Series A and B rounds, including revenue multiples, burn efficiency standards, and practical fundraising strategies for founders navigating a tighter market.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Jason as informed peer 0.0 Guest teaching 0.0 Guest disagreement 0.9 Jason pushing back 0.0
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:55 Debunking founder complacency in fundraising
Specht emphatically rejects the naive founder mindset of relying on five polite VC calls, asserting that only hard term sheets matter.
Hardest push from Jason ▶ 0:00 No host pushback in solo presentationThe session is delivered as a solo keynote presentation without host participation or verbal pushback.
Biggest teaching moment ▶ 0:00 Reframing valuation drops to historical normalSpecht educates the audience by dismantling the premise that valuations are unusually low, proving they merely returned to 2020 baselines.
Jason holds their own ▶ 0:00 No host participationThe host did not speak during this recorded presentation transcript.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Reframing Startup Valuations to 2020 Historical Baselines | 0 | 0 | 1 | 0 | Monologue presentation by Peter Specht analyzing Creandum market survey data. Specht reframes the drop in startup valuations as a return to 2020 baseline norms rather than an anomaly. | |
| Evolving ARR Thresholds Across Funding Stages | 0 | 0 | 1 | 0 | Solo keynote presentation detailing ARR requirements across seed, Series A, and Series B rounds, noting that Series A expectations have shifted up to 2M-4M ARR. | |
| VC Expectations for Series A and B ARR Multiples | 0 | 0 | 0 | 0 | Specht breaks down Creandum's VC survey data regarding healthy ARR multiples for Series A and Series B stages without any host interruption. | |
| Core Drivers Determining Higher versus Lower Multiples | 0 | 0 | 1 | 0 | Specht outlines the key drivers separating top-quartile multiples from lower multiples, including growth velocity, gross margins, and tier-one term sheet competition. | |
| Shifting Growth Demands and Burn Multiple Benchmarks | 0 | 0 | 1 | 0 | Specht presents data on shifting growth demands and tightening burn multiple benchmarks, noting that Series B investors now demand sub-2x burn multiples. | |
| Balancing Burn and Growth with the Planning Matrix | 0 | 0 | 0 | 0 | Specht details the burn-growth matrix framework used to balance runway, cash burn, and growth targets during budgeting and board planning. | |
| Strategic Execution and Founder Discipline in Fundraising | 0 | 0 | 2 | 0 | Specht walks through fundraising execution tactics and cautions founders against being flattered by polite initial VC feedback. | |
| Adapting to Market Realities: Extended Runway and Down Rounds | 0 | 0 | 1 | 0 | Specht concludes his talk by advising founders to secure 24-30 months of runway and embrace flat or down rounds rather than risking capitalization failure. |
Statements from this episode (18)
Specht: Startup Valuations Have Returned to 2020 Baseline Levels
“But the interesting aspect actually is, when looking at this chart, as valuations actually have just gotten back to the levels they were in, in 2020.”
Specht: All recent outlier high-valuation funding rounds are AI rounds
“All the outlier rounds that raced on very high valuation have been AI rounds.”
Specht: Top Series A rounds require $2.5M to $4M ARR
“And if we look at the rounds that have happened here, that being done by very good funds, is, You know, between two and a half million AR and four million AR.”
Specht: Series B rounds now require at least $5M ARR
“B rounds start at five million ARR with a tendency towards more.”
Specht: Outlier AI deals can still raise at 100x ARR
“And then selective AI deals, the outliers, Still, still play on 20, 21 levels. Typically if they show very high growth, and they race then on a, can race on something like a hundred XAR if it's like a very, you know, sought after and competitive process.”
Specht: Most completed 2023 VC rounds required 3x to 5x growth
“So when talking to investors about these rounds that happened and what we saw in the market, actually most of the rounds that happened have been more towards three to five X in growth.”
Specht: Recent Series A rounds averaged 25x ARR with 21x median
“So at series A, the average has been around 25 x of the rounds that happened in the past months.
And the median there is around 21 x.”
Specht: 70% of VCs consider 20x to 30x healthy Series A multiples
“And here the answer is between Series A it's roughly 20 to 30 X.
So, 70% of the people fall into that range.
The bucket, actually, with the largest, you know, share of answers, 40%, is 25 to 30 X.”
Specht: Most VCs view 15x to 20x as healthy Series B multiples
“Ah, this is series B, and here we assume six million ARR for a series B.
And there the picture is slightly more concentrated, where most of the people think that 15 to 20 X is a healthy multiple, you know, for that stage.”
Specht: 2x to 3x Growth Results in 15x Valuation Multiples
“In the lower multiple buckets, like, in the, let's say, in a range of, like, 15 to 25, you would rather end up at the 15 X multiple range if you are growing, let's say, two to three X. So, solid good growth, but not hyper growth, not, like, very fast growth. T…”
Specht: ARR Multiple Benchmarks Only Work Above $1.5M-$2M ARR
“Typically, I think the multiple comparisons work well from, like, one and a half million, two million ARR upwards. When the base is, you know, much lower than that, then multiples are simply just very high because the denominator is so small in the calculation…”
Specht: Minimum growth benchmarks are 2.5x for Series A, 2x for B
“So right now it's series A. It starts between like two and a half to three X as the minimum growth expectation. And then at series B, it starts at two to two and a half X as the minimum growth expectation.”
Specht: Over 90% of VCs expect Series B burn multiples under 2x
“Where 40% of the people expect a burn multiple between one and one and a half, which is considered to be a great burn multiple. And, 53% want to see one and a half to two X burn multiple. So, 90% of the people, of the funds, want to see burn multiples, ideally…”
Specht: Limit investor pitch calls to a maximum of five per day
“I also always recommend to maximum have five investor calls per day and not go for like 15, because you sometimes realize that people are, you know, worn out at the end of the day. You don't have the right energy of it. So rather, you know, ah, focus your ener…”
Specht: Founders must ignore early VC praise because only term sheets count
“And the most important point here is don't get blinded by initial off. Only a term sheet counts. What do I mean with that? It's the job of a VC to shine, you know, to show you initial love.”
Specht: Founders should raise 24 to 30 months of runway
“Typically I said, like, raise money for 24 months of runway, now, or 20 to 24 months of runway, now I would say actually 24 to 30 months of runway, ideally to more towards 30 months of runway, given the uncertain market,”
Specht: Startups must start fundraising nine months before cash out
“It's not starting six months before cash out anymore. It's more starting, you know, nine months before you run out of cash, because after two, three months, you realize if the fundraise was probably successful or not. And if it's, you know, tough fundraise or …”
Specht: Founders should prioritize closing rounds over high valuations
“And then, flat and down rounds are happening. We're seeing them across in the market. Everyone wants to avoid them. No one likes them. But they're the reality. And I would suggest prioritizing making a round happen over pushing on valuation.”