Startup valuations have never been higher. What’s causing this frenzy?
Business Insider recently posed that question to six investors, including Joe Raczka, COO and managing partner at York IE. Their consensus answer was two-fold:
- Investors are hotly competing with each other to get in on potential billion-dollar companies, which is driving up startup valuations.
- There are a lot of strong startups that deserve the valuations they’re getting.
Software companies are in a particularly good spot, BI reported, because they can scale and attract customers faster, which can mean faster returns for investors. Additionally, companies that have survived the pandemic have proven themselves to be resilient.
“All of those trends are massive tailwinds,” Raczka said. “We’re seeing more good companies.”
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