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The great VC pullback of 2022

mattturck.com

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Re: The great VC pullback of 2022

#101

Post by lumost »

treis wrote: post #95
pan69 wrote: post #82

Earlier quoted context omitted.

> Companies who are about to run out of money will often claim to pivot in a different direction, launch new products, or go on hiring binges. Why would a company that is about to run out of money go on a hiring binge?

Because a 1% chance of turning the company around is better than a guaranteed slow bleed to insolvency.

To add to this, growing headcount and fancy marketing can get the dumb money to re-up.

If you double customer acquisition costs through sales HC, you’ll probably get some new growth.

If you build a whole new team for a trendy thing, it might match some investor thesis.

Re: The great VC pullback of 2022

#103

Post by jlawson »

abraxas wrote: post #99
adventured wrote: post #88

Earlier quoted context omitted.

A lot of the high valuation / high multiple stocks from the latest bubble have already cratered. Snowflake has gone from $405 to $171. Zoom has gone from $406 to $99. Shopify has gone from $1762 to $426. Unity has gone from $210 to $66. Square has gone from $289 to $99. Roblox has gone from $141 to $30. Coinbase has gone from $368 to $112. Robinhood has gone from $85 (really $50-$60 stable) to $10. Rivian has gone fr…

How these prices reached those levels without anyone batting an eyelash a mere 20 years after the last dotcom bust is beyond belief. It's never "different this time", folks.

Several of today's biggest companies in the world were startups during the dotcom crash, and survived it, lost value, but then came back and took over the world.

Perhaps investors are thinking that some of these companies might do the same thing.

Re: The great VC pullback of 2022

#104

Post by HWR_14 »

abirch wrote: post #93
oarabbus_ wrote: post #86

Earlier quoted context omitted.

>Huge red flag the minute leadership shifts from growth to profitability. Hasn't over 2/3rds of FAANG done this since the beginning of the year?

Are you discussing internal projects because Facebook, Amazon, Apple, and Google have been profitable for a while. Netflix lost growth and was crushed.

Netflix lost growth when they cut off Russia. Somehow (I have no idea how) they seem to have grown without it.

Re: The great VC pullback of 2022

#105

Post by mupuff1234 »

jlawson wrote: post #103
abraxas wrote: post #99

Earlier quoted context omitted.

How these prices reached those levels without anyone batting an eyelash a mere 20 years after the last dotcom bust is beyond belief. It's never "different this time", folks.

Several of today's biggest companies in the world were startups during the dotcom crash, and survived it, lost value, but then came back and took over the world. Perhaps investors are thinking that some of these companies might do the same thing.

Most of the companies in above list are actually fairly mature companies (10 years+).

I think it they had the potential to take over the world, they probably would have already, or at least show some serious signs of doing so.

Re: The great VC pullback of 2022

#106

Post by ant6n »

abraxas wrote: post #99
adventured wrote: post #88

Earlier quoted context omitted.

A lot of the high valuation / high multiple stocks from the latest bubble have already cratered. Snowflake has gone from $405 to $171. Zoom has gone from $406 to $99. Shopify has gone from $1762 to $426. Unity has gone from $210 to $66. Square has gone from $289 to $99. Roblox has gone from $141 to $30. Coinbase has gone from $368 to $112. Robinhood has gone from $85 (really $50-$60 stable) to $10. Rivian has gone fr…

How these prices reached those levels without anyone batting an eyelash a mere 20 years after the last dotcom bust is beyond belief. It's never "different this time", folks.

It’s fine as long as somebody else is holding the bag

Re: The great VC pullback of 2022

#108

Post by papito »

tchock23 wrote: post #20
math-dev wrote: post #18

Earlier quoted context omitted.

Silicon Valley was a great show

Those quotes came from Wecrashed about WeWork.

I actually read Billion Dollar Loser this year, and the show is dead on. The book has more WTF moments in it, but the show's S-1 fiasco was juicer, if I remember correctly.

Re: The great VC pullback of 2022

#109

Post by __derek__ »

dustingetz wrote: post #25

How exactly does the fed funds rate flow through categories of financial entities that end up inflating growth equities and therefore VC returns? I understand the total cash in the system is vaguely leveraged/multiplied by borrowing, but this borrowed money flows through which parties specifically and how do these vaguely spoken of economic forces actually interact?

Minimal impact (probably). Most money in VC has an extremely long duration (e.g., pensions, endowments), so investing it in ultra-short-term assets is not a desirable option. Low long-term rates have a bigger impact, but that's a chicken-and-egg problem: the amount of institutional money seeking long-term returns exceeds the amount of safe assets, putting downward pressure on yields and pushing institutional money into riskier assets. This safe asset shortage is unrelated to the Federal Funds Rate on overnight lending.

Re: The great VC pullback of 2022

#110

Post by artemonster »

Ekaros wrote: post #69
artemonster wrote: post #6

Yeah I mean how can most (and even billion dollar valued!) startups forever bleed money and need to raise Series XYZ. As if this whole startup scene is just like the pyramid, but with extra steps

I have long wondered about so when and how are you going to make money? And do you really think that there is no competition or new entrants in the market? Be it food delivery, taxi services or streaming... Or social networks... If the big names are kinda messy looking, how well are smaller ones?

Sorry I dont get your point
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