Market Update and Trends w/ Becki DeGraw | Wilson Sonsini Startup Legal Basics
This Week in Startups
Jason Calacanis
4.4 • 1.3K Ratings
🗓️ 28 August 2025
⏱️ 26 minutes
🧾️ Download transcript
Summary
Today’s show:Wilson Sonsini Partner Becki DeGraw returns to Startup Legal Basics with Jason to break down what’s happening in today’s startup market. From excess dry powder on the VC side to companies struggling to “grow into” their valuations, Becki shares what founders need to know about deal terms, pay-to-play provisions, and the shift from the 2021 heyday to today’s more structured environment.
- Why down rounds and structured deals are becoming more common
- How “pay-to-play” works (and why it’s showing up so often now)
- The psychology of VCs vs. founders during tough fundraises
- What the M&A landscape really looks like in 2025
- Legal provisions investors are using to protect themselves in today’s talent wars
Whether you’re a founder preparing for your next round or an investor navigating tougher terms, this conversation will help you understand the new realities of startup fundraising.
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Timestamps:
(0:00) Becki DeGraw joins Jason for Startup Legal Basics
(1:12) The “perfect storm” shaping today’s startup market
(4:30) Companies struggling to grow into 2021 valuations
(6:31) Why down rounds and structured deals are rising
(8:59) Pay-to-play explained: what happens if investors don’t participate
(15:43) The mid-market M&A wave vs. big tech acquisitions
(20:37) Talent wars, acqui-hires, and protective legal provisions
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Check Out Wilson Sonsini: https://www.wsgr.com
Check out all of the Startup Basics episodes here: https://thisweekinstartups.com/basics
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Follow Becki:LinkedIn: https://www.linkedin.com/in/rebecca-degraw-639bbb62/
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Follow Jason:
LinkedIn: https://www.linkedin.com/in/jasoncalacanis
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Follow TWiST:
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Transcript
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| 0:00.0 | Hey, everybody, welcome back to this week in startups. I'm your host, Jason Callicannis. |
| 0:07.7 | We do a series called Startup Basics. Why do we do this series? Very simple. I get asked the same |
| 0:13.5 | questions over and over again. And the answers to those questions are often the same this year |
| 0:18.5 | as they were last year. Sometimes they change, and sometimes the changes |
| 0:22.7 | are where startups, founders, investors can make huge mistakes or find huge opportunity. One of the |
| 0:29.9 | areas we like to talk about is legal. We also talk about accounting, HR, AI. There's a lot of |
| 0:34.3 | different topics. But legal is one that is dynamic. There are tried and true |
| 0:38.4 | strategies that you have to get right. And then there are new opportunities and changes in the law. |
| 0:43.5 | So we are extremely lucky. Becky de Grau is back to do legal basics with me. She's a partner at |
| 0:49.6 | Wilson Sincini. And she works with startups. A lot of my startups and has helped me on a lot of fun adventures in startup. And we will save some of those to protect the not so innocent. |
| 1:03.8 | Yes, thanks for having me, Jason. Always good to be back. |
| 1:07.0 | This week in startups.com slash basics. You can see Becky and I doing this now for, gosh, five years or so. |
| 1:12.5 | Let's talk about the market because it's always good. When you talk to your service providers and your |
| 1:17.8 | partners, they see across many clients. And then there are many different divisions. So you might |
| 1:23.1 | see a division that maybe wasn't getting a lot of attention. Patents all of a sudden get a lot of |
| 1:27.7 | incoming, or you might see IP lawyers all of a sudden get lit up and they stop working on Disney |
| 1:33.1 | stuff and they start working on LLM stuff. So here we are. What do you think is happening in the market |
| 1:39.0 | today as far as Seat Stage Series A startups are concerned? First, I might take a step back and say, let's look at the overall backdrop of the ecosystem. I feel like we've kind of had a little bit of a perfect storm of what has led us to this point, which then influences all the types of firms and different things that we're seeing. So when I think about the ecosystem, I think about it, right? We've got the fund, the investor side, and we've got the company side. On the fun side, funds had record |
| 2:06.5 | breaking years for raising larger and larger funds, right, beginning in 2020, 21, even 2022. But then |
| 2:14.1 | the world changed and deal flow slowed down, especially in the later stage, B and Beyond. |
| 2:19.6 | And the seed in the A, it stayed pretty consistent. |
| 2:22.2 | But it was really the B and Beyond stage that went like crickets in 2023 in the first half of 2024. |
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