Mind games and “dirty term sheets.” These are the kinds of potential pitfalls that await tech entrepreneurs and employees in the financial landscape of 2023, especially those particularly in need of fresh infusions of venture capital.

In this latest episode of Onward, Fundrise CEO Ben Miller walks co-host Cardiff Garcia through another set of fascinating — if often unforgiving — complexities arising from today’s high interest rate environment. Now that capital is no longer flowing freely and willingly from investors across the country, what options do tech leaders have when their companies’ valuations plummet in comparison to the sky-high estimations from just last year?

As Ben emphasizes once again, when we’re uncertain about the future, we should always look to the past. Using lessons learned from the 2000 tech bubble collapse, Ben illustrates for us how a company seeking venture capital in a harsh financial environment like today’s has a choice. They encounter a fork in the road: Is it more prudent to take a down round and accept a lower valuation? Or better to accept structured money and dirty terms, while maintaining the high value assessments assigned during the fundraising of earlier rounds? Does it ever make sense to bring new investors onboard, when their primary, driving incentive is for a company to sell as quickly as possible?

It should be no surprise to Onward listeners that Ben cautions patience and prudence in cases like these, with only one major exception. To learn what that exception is, listen to the full episode, where you’ll also hear:

  • How “structured” preferred equity can give venture capital a dominant, often destructive advantage over entrepreneurs.
  • Why “tech valuation headlines are deceptively not correct.”
  • How term sheets in a down market play on exactly the instincts of entrepreneurs that made them successful to begin with: optimism.
  • Why virtually no tech entrepreneurs today are actually electing to accept a down round… and where Ben thinks that choice will lead them.
  • How all of these insights, earned from years of experience by Fundrise’s leadership team, has helped shape Fundrise’s own approach and attitude toward raising capital.

All this and more in the latest episode of Onward, anywhere that you listen to podcasts.