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Pinterest’s modest I.P.O. valuation should worry other unicorns

The digital pin board company disclosed today that its I.P.O. would value it at less than its last private fund-raising round. That’s a big warning sign for other tech companies that are poised to go public this year.

The high range of Pinterest’s I.P.O. would value it at $11.3 billion, below the $12 billion attained from private investors two years ago. In Silicon Valley speak, that’s a “down round” — something companies generally hope to avoid because it undermines confidence.

Coupled with early volatility in Lyft’s first days of trading, the Pinterest offering suggests that public market investors are wary of maintaining high valuations for tech start-ups, especially given that many won’t turn a profit for years.

It comes as a slew of unicorns are preparing to go public, including Uber (whose I.P.O. was expected to give a valuation as high as $120 billion), the workplace messaging platform Slack and the software company PagerDuty.