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Illustration: Brendan Lynch/Axios

Valuations for U.S. venture-backed companies are at record highs, per data released this morning by PitchBook.

Between the lines: It's the new normal, in which nontraditional investors are traditional, unicorns are pigeons and startups are in the driver's seat.

Inside the numbers: Valuation creep can be seen across all stages of the VC ecosystem, from seed to pre-IPO. It's also showing up in both the medians and averages, and also across quartiles, reflecting how this isn't just a few big deals skewing the data.

  • Early-stage valuations hit all-time records in Q2 2021 of $50 million (median) and $105.4 million (average).
  • Late-stage valuations also hit new highs, with the trendline suggesting that average late-stage valuations could top $1 billion by year-end.
  • Value hunting: Deals in the four major tech hubs of SF, NYC, LA and Boston remain more expensive than deals elsewhere in the U.S.

What's happening: Most of this is just animal spirits running rampant, with price discipline now viewed as passé. Plus a ton of crossover money seeking yield and public equity markets forcing a reverse denominator effects on LP bankrolls.

  • This often means that funds are owning smaller percentages of their portfolio companies, with average late-stage stakes falling below 20% for the first time ever.

What to watch: Fed tapering? Congress raising taxes on the wealthy? Maybe, but we've just lived through 18 months of a global pandemic that freaked out investors for all of five minutes.

  • Until and unless the public markets repeatedly punch venture capitalists in the nose, forcing them to taste their own red ink, startup valuations will continue to rise. And there's no indication that's going to happen, after several years of feeling like it should happen.

Go deeper

Miriam Kramer, author of Space
Aug 31, 2021 - Economy & Business

The state of space startups

Illustration: Annelise Capossela/Axios

Space startups garnered record investment last year, according to a new report.

Why it matters: The influx — despite the coronavirus pandemic — shows that investors are still interested in the growing industry and see relatively young companies as worthy of funding.

2 hours ago - World

Soldiers seize power in Burkina Faso as global coup surge continues

Mutinous soldiers in Burkina Faso declared on state television Monday that they had deposed the government, closed the borders, and taken control of the country. President Roch Marc Christian Kaboré has reportedly been arrested.

The big picture: This would be the third successful military coup in west Africa in eight months, after juntas took power last year in Guinea and in neighboring Mali.

3 hours ago - World

Pentagon: 8,500 troops on high alert for possible deployment to eastern Europe

Photo: Anna Moneymaker/Getty Images

Defense Secretary Lloyd Austin has placed 8,500 U.S. troops on "heightened preparedness to deploy" to eastern Europe in case NATO activates its rapid-response force over tensions with Russia, the Pentagon announced Monday.

Why it matters: No decisions have been made to actually deploy U.S. forces, but the heightened alert level will allow the military to rapidly shore up NATO's eastern flank in the event that Russia invades Ukraine. The Pentagon warned that Russia has shown "no signs of de-escalating," and continues to amass troops on Ukraine's borders.