> There are, these days, a lot of startups that used to be worth $1 billion and are now worth $500 million. Some of them raised money at $1 billion valuations, back in the good times, and now they need to raise money again. It is, for some combination of good and bad reasons, extremely undesirable for a startup that raised money at $1 billion to raise money again at $500 million. Therefore there is a business opportunity for a fund that will:
> 1. Give startups money at a $500 million valuation, but
> 2. Say that it’s at a $1 billion valuation.
> This is called “structure,” or “structured equity.” Bloomberg’s Gillian Tan reported Friday:
> > Philippe Laffont’s Coatue Management raised about $3 billion for a structured equity fund that allows closely held companies to avoid raising money at lower valuations, a person with knowledge of the matter said.
> > With the market for initial public offerings in a funk and lower risk appetite from large venture capital investors, some startups have sought to raise convertible notes and pursue structured financings instead of accepting a lower valuation through a traditional equity funding round.