No matter where you are in your fundraising cycle, rightsizing your organization is what needs to be done now. Start this by looking at your cash flows––and I mean real cash flows, not some investor-friendly forecasting deck. If your runway is less than 18 months, then you have to raise more money. That’s a natural result of the economic climate we’re in.
But at the end of the day, your focus shouldn’t be on valuations. It should be on the business. One healthy exercise I recommend for founders is to look at the actual difference in dilution a potential down round will make. My bet is that you will be surprised how little it matters in relation to the existential risk of running out of money. So swallow your pride and do the deal. You will be in good company in the next few months.