Late-Stage Startup Valuations Rebound Amidst Megadeals, Yet 2024 Saw 67 New Unicorns

CAMBRIDGE, MA – Brian Halligan, co-founder of HubSpot and a notable investor, issued a stark warning to startup founders regarding the pursuit of inflated valuations, asserting that many will face regret "when the bubble pops." His recent social media post, shared on October 22, 2025, cautioned, "Just because you can raise at 100x, doesn't mean its the right decision." This sentiment underscores a growing concern among some industry veterans about market sustainability.

Halligan, known for his direct advice to entrepreneurs, has previously encouraged founders to consider selling their companies during favorable market conditions. His current warning suggests a perceived overvaluation in parts of the startup ecosystem, particularly for companies prioritizing high fundraising multiples over fundamental business health. He has consistently advocated for strategic decision-making beyond immediate financial gains.

Recent data from Q1 2025 reveals a complex venture capital landscape. Global VC investment saw a rebound, reaching $126.3 billion across 7,551 deals, largely propelled by a surge in megadeals, including a $40 billion raise for OpenAI. Median late-stage valuations have notably rebounded, while deal volume experienced a decline, indicating a more cautious approach from investors. Despite this, the market continues to mint unicorns, with 67 startups surpassing the $1 billion valuation mark in the first three quarters of 2024 alone.

Experts note a prevailing "cautiously optimistic" sentiment, with AI-driven innovation attracting significant capital. However, concerns persist about an "AI bubble," where high expectations and massive investments have yet to consistently yield substantial profits. This environment is leading investors to increasingly prioritize strong fundamentals, sustainable growth, and clear paths to profitability, particularly in later-stage funding rounds.

The market's mixed signals—robust investment in key sectors like AI contrasted with declining deal volumes and increased scrutiny—suggest a period of recalibration. Founders are being advised to focus on intrinsic value and long-term viability, aligning with Halligan's caution against maximizing valuations without a solid foundation.