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What's 🔥 in Enterprise IT/VC #273
Talent in a down market 📉
As I tweeted this data out from Cambridge Associates, I didn’t realize that we would end the week with a market correction.
A market correction is a decline of 10% or greater in a market and well folks, the Nasdaq blew threw that this week as its down more than 14% below its November record close. And that does not even show how bad it is for some stocks.
Gitlab which went public in mid-October last year is down over 50% from it’s peak with a valuation of $8.6B now.
Hashicorp was valued at over $14B on its IPO last month and now sits at $10.7B and its down over 40% from its market high.
So how bad is it? Jamin Ball from Clouded Judgement shares where multiples are after this week:
Update on Multiples
When looking at median multiples we’re now below where we were pre-covid. The overall median multiple is 7% below pre-covid highs, 13% above where we were on Jan 1, 2020, and 8% below the previous peak in August 2019.
However, high growth software multiples are still elevated. Looking at high growth software median only - we are still 49% above pre-covid highs, 76% above where we were on Jan 1, 2020, and 17% above the previous peak in September 2019
While multiples are off significantly for the Top 5 Median of 80x EV/NTM, it’s still at a healthy 33x next twelve month revenue. Late stage investors are adjusting on the fly this week as I’ve heard of some pulling back term sheets and others changing pricing. This has not filtered down to the early stages yet and given the amount of 💰 raised in the last year and on the sidelines, IMO early stage will continue to be strong as there is no better place to invest capital.
For founders who are just building, this is the best time ever to poach talent, especially from the public companies where employees unfortunately have underwater stock. This is also a great time to hire from private companies where valuations are super high and company performance is lagging. As you know, I’m always looking for the bright side and I continue to see a ton of opportunity to keep funding founders on day one.
As always, 🙏🏼 for reading and please share with your friends and colleagues.
❤️ the power of why and how Segment found PMF 🧵
I may dive into this more next week post market meltdown - the nuance here is timing and honesty…
The long arc of developer first businesses - focus on amazing developer experience and ❤️ first - takes time to nail down the largest of enterprises - such massive opportunity ahead for Stripe but patience in early days was 🔑🚗 is moving to ! Our fastest-growing segment is now large, established businesses looking to retool for the digital age. detroitnews.com/story/business…
And if you’re selling to enterprises like Ford, well you need a CRO like this 👇🏼
Great read on why integration testing and what’s new and how Atomic Jar (portfolio co) is helping companies like Spotify, Google, Instana and Oracle
“North built Testcontainers as an open source library that lets developers “test with containers” against data stores, databases, or anything else that can run in a Docker container, including popular frameworks such as Apache Kafka. Testcontainers provides an ergonomic, code-based way for developers to harness containers for local and continuous integration testing, without forcing every developer to become an expert on the many nuances of containers.”
💯 just the beginning with images…
Amazing how much of this has been said since I started venture 25+ years ago and yet…still lots of opportunity
Dev rel is one of hardest rolls to fill esp. if you look for one of these 🦄
👇🏼 want to start a newco? see below…
GDPR is real as EU issued $1.2B of fines in 2021
Must read on attack vectors on CI/CD pipelines
“Mainstream appreciation for cyberattacks targeting continuous integration and continuous delivery/continuous deployment (CI/CD) pipelines has been gaining momentum. Attackers and defenders increasingly understand that build pipelines are highly-privileged targets with a substantial attack surface.
But what are the potential weak points in a CI/CD pipeline?”
Rough week for crypto as well (Bloomberg)
“Bitcoin’s decline since its November high has wiped out more than $570 billion in market value, and roughly $1.17 trillion has been lost from the aggregate crypto market”