Venture capitalists heavily invested in the location-based services industry–or any other for that matter–are likely cursing under breath today. PEHub reports that startup valuations in Q4 2008 fell a huge 24 percent from Q3 2008. There can be no arguing that it’s a huge dent, especially considering it was made in only 3 months.
The number was reported by Angelsoft, a company that produces VC trend-tracking software. Angelsoft says 128 deals completed in Q4 had a median pre-money valuation of $3 million. In Q3, the firm reported 123 deals with a median value of $3.9 million. The company says that this is the largest quarter-to-quarter drop in the 4 years it has been tracking venture capital.
The only upside to the numbers, if you can get past the dollar signs, is the revelation that more deals were completed in the fourth quarter when the global economy, or at least our perception of it, was undoubtedly worse. Oh, and one more thing: don’t ask me why the graph above doesn’t correlate with the numbers reported. They both come from Angelsoft. Update: Jason from Angelsoft says the above graph refers to the average valuation of companies that applied for funding which is why it doesn’t correlate to the $3 million value which is the average value of companies that received funding.
