The partners at Right Side Capital Management (RSCM), a micro venture capital fund focused on pre-seed stage investments, have made an interesting observation recently about valuations of early stage companies: While the valuations of companies raising money at the Series A stage or later have risen substantially over the past few years, the valuations of pre-seed stage companies have fallen. More importantly, they think the reason is basic economics: a simple imbalance of supply and demand for capital at the pre-seed stage.
