2016-04-15wsj.com

Venture-capital investors hit the brakes on investing in the first quarter, following a funding bonanza the past two years that pushed valuations of once-hot technology startups to soaring heights. Funding for U.S. startups fell 25% from the fourth quarter to $13.9 billion, the largest quarterly decline on record since the dot-com bust, according to data from Dow Jones VentureSource. The numbers of deals also hit a four-year low of 884.

The drop threatens to hasten a slump rippling through Silicon Valley that is pushing startups to slash marketing budgets, lay off staff and dial back lofty ambitions... The sky-high valuations of last year have retreated as a result. In the first quarter, the median value of U.S. startups plummeted to $18.5 million after hitting a peak of $61.5 million in last year's third quarter.

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On-demand food-delivery service DoorDash Inc. had been seeking a large valuation uptick in its latest financing round, but was instead forced to sell its shares in February at a 16% discount to its price last March. Location-sharing mobile-app maker Foursquare Inc. had its valuation shaved 69% in a financing round in January, corporate documents show.

Others startups, such as meal-delivery service SpoonRocket Inc., weren't as lucky and went belly up. The company called it quits in March after raising $13.5 million in funding.



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