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Dizzying Ride May Be Ending for Startups

107 点作者 thatcherclay超过 9 年前

24 条评论

hvs超过 9 年前
For those of you too young to remember, there were numerous articles written about the bubble bursting before it finally did in 2000-01. It wasn&#x27;t a surprise that it did, just that no one knew precisely <i>when</i> it would.<p>My point is that arguing that people have said this bubble was about to burst and that it hasn&#x27;t yet isn&#x27;t an argument that it won&#x27;t.
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dgreensp超过 9 年前
Sam Altman has already explained why late-stage private valuations -- but not earlier-stage or public valuations -- are bubble-like right now:<p>&gt;To summarize: there does not appear to be a tech bubble in the public markets. There does not appear to be a bubble in early or mid stages of the private markets. There does appear to be a bubble in the late-stage private companies, but that’s because people are misunderstanding these financial instruments as equity. If you reclassify those rounds as debt, then it gets hard to say where exactly the bubble is.<p>&gt;At some point, I expect LPs to realize that buying debt in late-stage tech companies is not what they signed up for, and then prices in late-stage private companies will appear to correct. And I think that the entire public market is likely to go down—perhaps substantially—when interest rates materially move up, though that may be a long time away. But I expect public tech companies are likely to trade with the rest of the market and not underperform.<p><a href="http:&#x2F;&#x2F;blog.samaltman.com&#x2F;the-tech-bust-of-2015" rel="nofollow">http:&#x2F;&#x2F;blog.samaltman.com&#x2F;the-tech-bust-of-2015</a>
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jgrahamc超过 9 年前
It&#x27;s time for a new term: a &quot;Pegasus&quot; (a different kind of mythical horse than a unicorn):<p><a href="https:&#x2F;&#x2F;twitter.com&#x2F;jgrahamc&#x2F;status&#x2F;658702918200250368" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;jgrahamc&#x2F;status&#x2F;658702918200250368</a><p><pre><code> Pegasus (n) 1. Mythical winged horse; 2. Silicon Valley &#x27;unicorn&#x27; with high gross margin. i.e. one that might actually take off.</code></pre>
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chollida1超过 9 年前
Fidelity has just marked its shares down from $30.72 at the end of June to $22.91 for the end of September.<p>To be fair, I think these markdowns have more to do with who is investing than the companies themselves.<p>VC&#x27;s do portfolio valuations much less frequently than mutual funds, PE firms or hedge funds do and they give less negative scrutiny to the valuation than the aforementioned firms do, the reason for this....<p>... is VC firm&#x27;s typically don&#x27;t allow redemptions on monthly intervals which means they can keep an unrealistic valuation for longer where as Hedge funds, PE firms and mutual funds, who typically allow monthly redemption, need to properly value each holding at the end of each month.<p>I mean if you are a VC, do you care if you don&#x27;t write down Snap-chat at the end of the month, you really have no incentive to do so?<p>You get paid on a quarterly basis on the size of your portfolio, why mark it down until you are absolutely certain that it needs to be marked down, this point is usually not until you actually go to sell, be it IPO or private equity deal.<p>However, if you are a hedge fund and someone wants to redeem their assets, you want to make sure you value Snap-chat for what you can realistically sell if for as that&#x27;s essentially what you are doing when you allow someone to redeem their funds from your firm.<p>With people pulling money out of hedge funds, and PE firms on a monthly basis, this makes you have to pay attention to valuations on a much more granular time frame than historically VC firms would have.
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rdlecler1超过 9 年前
If Fidelity just did a 25% write down on SnapChat on the most senior portion of a $600m investment round, and assuming that Fidelity has at least a 1x liquidity pref&#x2F;ratchet, then SnapChat is now valued at $462M floor, not $15 billion.
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alp1970超过 9 年前
I always get scared when &quot;delivery&quot; based start-ups get hot. Reminds me of Kozmo, UrbanFetch, WebVan, Askville...
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damon_c超过 9 年前
If I may speculate, it seems like the end result of this situation will be that in the future, startups will avoid taking money from mutual funds or anyone else who must attempt to accurately value their holdings publicly, whenever possible.
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code4tee超过 9 年前
The only people that don&#x27;t see a bubble at the moment are the people inside the bubbles.<p>If your business has real revenue and real profit then there isn&#x27;t much to worry about. If your business is valued on &quot;hype&quot; and theoretical valuations then you have reason to worry.
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koblas超过 9 年前
What we&#x27;re seeing an issue with valuations and investments. TechCrunch just did a really good piece on how a raise of $150M gave a $6B valuation with a preference that guaranteed a 20% return on investment to the Series E investors (at the cost to the early investors).<p><a href="http:&#x2F;&#x2F;techcrunch.com&#x2F;2015&#x2F;11&#x2F;10&#x2F;squares-s-1-of-ratchets-and-unicorn-valuations&#x2F;" rel="nofollow">http:&#x2F;&#x2F;techcrunch.com&#x2F;2015&#x2F;11&#x2F;10&#x2F;squares-s-1-of-ratchets-and...</a><p>So what we&#x27;re seeing is that people are starting to re-think valuations in the face of these preferences.
debacle超过 9 年前
While things might wind up bad for the next round of unicorns, things are likely to be better for startups overall once the trend of &quot;To the moon!&quot; dies down just slightly. Hopefully we can return to a world where an acquisition isn&#x27;t seen as a failure.
tmaly超过 9 年前
I was doing a paid internship at Intel in 1999 out in Portland, OR. I remember seeing huge numbers of new hires every week. I met people out in Portland that were hired to due VB programming with no programming experience. A few months later, the music stopped and there were too few chairs to go around. I always think of the Austrian business cycle when I see such huge upswings in things
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axis967超过 9 年前
I think there are far too many startups that focus solely on growth&#x2F;reach. Build a sustainable business: revenue and more importantly gross margin are the key metrics that need to be thought about. While vcs want fast growth, it is often not in the best interest of common stockholders to jet ahead at the paces many of these companies go.
bsg75超过 9 年前
It would be a nice change if focus was on companies that produced a product or service with long term revenue prospects, instead of short term wildly high margins.<p>The current state of highly educated people looking for get rich quick schemes (unicorns) is tiresome.
andy_ppp超过 9 年前
I actually think the opposite, that we are in a period of history where <i>all</i> the software (and arguably businesses) people use day to day go from being crap to fantastic.<p>A gold rush for good startups I think.<p>The returns from sitting the right group of people in a room and getting them to make doing something a few orders of magnitude better than it was before is always going to be fantastic.
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vox_mollis超过 9 年前
Meta: why on earth is this submission being flagged off the frontpage ?
superuser2超过 9 年前
It&#x27;s an interesting time to be a year from graduation in CS, that&#x27;s for sure.<p>Maybe the folks beating the STEM drum will finally shut up when CS sees employment comparable to underwater basket weaving.
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brianmcconnell超过 9 年前
Whenever I hear the term &quot;unicorn&quot;, I think of the Squatty Potty TV ads (they&#x27;re funny!)
ForHackernews超过 9 年前
Oh thank god, finally. Maybe I&#x27;ll be able to afford an apartment again.
alphonse23超过 9 年前
My thoughts right now are: how will this reflect on Atlassian IPO?
thinkt4nk超过 9 年前
&gt; Dizzying Ride May Be Ending for Startups<p>&gt; may tap the breaks
mironathetin超过 9 年前
Next bubble burst is close.
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kshatrea超过 9 年前
Looking at India, this can be conflated with a global level ending of the dizzying ride. [0] gives a good overview of this. In short, the free lunch is now over and people are asking for results. I am sure it has a lot to do also at an economic level with the Fed now talking of tightening- that means interest rates are headed higher and there is more aversion to risk. I am not an economist, so others might have different opinions.<p>[0] <a href="https:&#x2F;&#x2F;goo.gl&#x2F;9MfjBa" rel="nofollow">https:&#x2F;&#x2F;goo.gl&#x2F;9MfjBa</a>
Alex3917超过 9 年前
I think a lot of companies who raised seed funding prior to 2010 or 2012 did so at excessively low valuations, and then tried to make up for it later by raising at excessively high valuations once they hit. The &#x27;bubble&#x27; over the last couple years that&#x27;s driven up pre-seed valuations should actually make the current crop of startups more stable over the long run.<p>Also, the decaying state of physical infrastructure in the U.S. is only going to drive more people to spend time on the Internet, where network effects are only getting exponentially more powerful as new networks are getting built on top of existing networks. These days a social startup that&#x27;s &quot;only growing as fast as Facebook&quot; might not even be able to successfully raise a seed round. There might be a cyclical downturn, but none of the underlying trends in society point to tech being a bad investment over the longterm.
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billybilly1920超过 9 年前
it&#x27;s ending again? Wasn&#x27;t it supposed to end the year before, and the year before that, and the year before that? When is google going to just drop news.google.com and have an algorithm write the same stories over every year?<p>Next up: The next [pick top product] killer! you won&#x27;t believe how [pick new or underdog product] is going to completely replace [pick top product] due to it&#x27;s [pick random feature in [pick new or underdog product]]
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