Available data show that Sacks’ timing and the qualitative description of a funding crunch with widespread down rounds and restructurings in H2 2023 and 2024 were broadly accurate.

1. Major funding crunch (capital into VC and startups)
   • In the U.S., VC investment fell from about $242B in 2022 to ~$171B in 2023 (≈35% drop), with deal count down ~23%, according to PitchBook/NVCA; NVCA describes 2023 as a pronounced continuation of the 2022 slowdown. (axios.com)
   • VC fundraising itself also seized up: PitchBook data show U.S. VC funds raised just under $70B in 2023, a ~60% decline from 2022 and a six‑year low, limiting available capital for startups in 2023–24. (pennmutualam.com)
   • Globally, Q1 2024 VC investment was near a five‑year low, with total funding and deal count both sharply reduced versus prior years, and analysts not expecting a rapid rebound—indicating the crunch persisted into 2024. (reuters.com)

2. Widespread down rounds in 2023–24
   • U.S. data compiled in the Big Book of Venture Capital 2023 show that 19% of venture rounds in 2023 were down rounds, up from only 5% in 2021 and the highest level in a decade; Q3 2023 alone had 17% down rounds. (slideshare.net)
   • A separate analysis using Carta data reports that on its platform, down rounds accounted for roughly 19–20% of all primary financings in each quarter of 2023, four consecutive record highs since 2018, and notes that down rounds had become “routine,” especially at later stages. (linkedin.com)
   • A 2024 Morgan Lewis survey likewise notes that 2023 produced the four highest quarterly down‑round rates since 2018, and that Q1 2024 had the highest share of down rounds in five years (≈23%), confirming that the wave of repricings continued into 2024. (jdsupra.com)
   • 2024 aggregate data show down rounds remaining elevated: about 20% of all priced U.S. rounds on Carta in 2024 were down rounds (roughly double the historical ~10%), with late‑stage companies seeing down‑round shares rising from 28% to 39% in early 2024; nearly half of late‑stage deals were flat or down. (scribd.com)
   • DocSend’s deal‑flow analysis finds that 33% of VC deals in Q1 2024 and 22% in Q2 2024 were down rounds, and nearly 30% of all deals were flat or down, still materially worse than pre‑2023 norms. (docsend.com)
   Together, these sources indicate that from H2 2023 through at least mid‑/late‑2024, down rounds were common across the ecosystem and well above normal levels—consistent with “widespread down rounds.”

3. Restructurings, recapitalizations, and harsher terms
   • Legal and market commentary aimed at venture‑backed startups notes a surge in complex down‑round financings, explicitly tying them to recapitalizations (“recaps”) and pay‑to‑play structures. Morgan Lewis describes recaps as often being done in conjunction with a down round and frames them as increasingly necessary tools to get new capital in during this period. (morganlewis.com)
   • Axios, citing Cooley data, reports that by Q2 2024, 8.7% of all VC deals included “pay‑to‑play” (cram‑down) provisions, a record share and a clear sign of aggressive recap-style structures that heavily dilute non‑participating existing investors. These provisions historically appeared mostly in stressed late‑stage deals, but by 2024 they were spreading across stages. (axios.com)
   • Standard VC glossaries and practitioner write‑ups emphasize that recaps are used when cap tables and prior preferences make fresh funding difficult—exactly the situation more startups faced after inflated 2020–21 valuations collided with the 2022–24 downturn—supporting that these recapitalization tools were indeed being deployed. (nexitventures.com)

4. Broader signs of ecosystem stress (“mass extinction” dynamics)
   • Morgan Lewis notes that startup shutdowns jumped from 467 in 2022 to 770 in 2023, and that Q1 2024 shutdowns rose another 58% year‑over‑year, highlighting elevated mortality as funding dried up. (jdsupra.com)
   • Carta and FT data show 2023 as the first year in at least five years with a net contraction in startup employment, including a wave of layoffs and sharply reduced hiring, reflecting widespread restructuring and belt‑tightening. (ft.com)

Taken together, these independent datasets show that in H2 2023 and throughout 2024 the startup ecosystem experienced: (a) a pronounced funding crunch, (b) historically high and sustained levels of down rounds, especially at later stages, and (c) increased use of harsh recap / pay‑to‑play structures alongside shutdowns and layoffs. That combination matches Sacks’ forecast of a major crunch characterized by widespread down rounds, restructurings, and recapitalizations, so the prediction is best judged as right.