The party is over. The era of 50x ARR multiples is dead, and it's not coming back anytime soon.
We are seeing a reversion to the mean. Public SaaS multiples have compressed back to 2015 levels (around 6-8x ARR). This has a cascading effect on private markets.
Burn Multiple is King
In 2021, investors asked "How fast are you growing?" In 2026, they ask "How much cash did you burn to get that growth?"
The new gold standard is a Burn Multiple under 1. If you are burning $2 to generate $1 of ARR, you are uninvestable in this climate.
The "Default Alive" Mindset
Founders need to operate as if their next round isn't coming. Profitability (or at least break-even) gives you optionality. Relying on VC capital to subsidize poor unit economics is a death sentence.
"Growth at all costs is replaced by efficient growth."
This shift favors bootstrapped founders and "lean" teams who use AI to keep headcount low while scaling revenue.