The Market Minute: Public Market Turmoil Could Upend Game For Late-Stage Startups

Volatility in the public stock markets is setting the private markets up for uncertainty this year.

“In general, the public market and the volatile nature of that does not create a good environment for the private markets in terms of valuation,” said Himalaya Rao, managing director of the seed-stage fund Black Founders Matter.

While stocks briefly showed signs of recovery earlier this week, they fell again Thursday after Facebook parent company Meta shed $250 billion in market value in a single day following a quarterly earnings report that didn’t impress investors.

Late-stage companies are affected more by the activity of the public markets because they’re closer to reaching that stage.

When their stock is up, they’ll look at a slew of companies, but when shares are down they tend to be more selective.

“At current levels, I think what’s going on in the public markets is healthy,” Flager said.

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