E141: State of Series A's, VC dry powder, IPO window opens + more with Bill Gurley & Brad Gerstner

Median Series A rounds and valuations are down versus 2022, yet Bill Gurley notes the market has not reverted to 2010-era austerity—top-tier A rounds, particularly in AI and infrastructure, still see strong competition and elevated pricing.

Companies that raised huge late-stage rounds at extreme valuations now have complex cap tables and large liquidation preference stacks; new private money often avoids these situations, pushing them toward recaps or down-round IPOs to ‘clean up’ and reset reality.

Capital is called from LPs over years, not front-loaded, and LPs face their own liquidity, denominator, and bonus-linked marking incentives—so the idea of a guaranteed wall of money rushing back into startups is overstated.

Younger funds and expanded platforms are stretching out deployment (e.g., 3–4 years) because running out of capital without realizations could jeopardize their ability to raise the next fund; “going slow” is a rational survival move.

With software multiples normalized and M&A constrained by regulators, high-quality names like ARM and Instacart are preparing to go public, often at major discounts to their last private valuations, which will reset cap tables and reprice late-stage paper.

The group highlights data showing that simply owning and rebalancing into top tech names or QQQ produced massive multi-decade returns; illiquid VC needs to clear a high bar (e.g., ~7x over 10 years) to justify its risk and illiquidity.

Core CPI is rolling over, yet the San Francisco Fed’s ‘effective funds proxy rate’ suggests the true tightness (rates plus QT) is at its highest since 2000, while household, government, and revolving debt are at records—raising recession and consumer stress risks.