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http://techcrunch.com/2015/11/10/squares-s-1-of-ratchets-and...
So what we're seeing is that people are starting to re-think valuations in the face of these preferences.
It's time for a new term: a "Pegasus" (a different kind of mythical horse than a unicorn): https://twitter.com/jgrahamc/status/658702918200250368 Pegasus (n) 1. Mythical winged horse; 2. Silicon Valley 'unicorn' with high gross margin. i.e. one that might actually take off.
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 'bubble' over the last couple years that's driven up pre-seed valuations should actually make the current crop of startups more stable over the long run. Also, the decaying state of physical infrastructure in…
The fact that our roads are crappy is going to turn people into shut-ins?
- A rapid increase in states requiring HS students to complete some of their classes online in order to save money.
- Folks being unable to get treatment for all sorts of health conditions and mental illnesses.
- The prison system not providing adequate job training or rehabilitation.
- The costs of college education increasing while the quality of that education decreases.
Are Internet startups the best way to solve all of these problems? Probably not. But in each of these cases startups are going to rake in the bulk of the money, if only because they're going to be the only game in town.
Thanks to complete gridlock at the federal level and general incompetence at the state level, sandhill road has effectively become the new congress. And like it or not, this probably isn't going to change anytime soon.
And as for your example with the roads, to quote @noUpside on Twitter the other day, "SF specializes in creating companies that are essentially 'New York as a Service' bc its infrastructure sucks." (https://twitter.com/noUpside/status/659094021151789056)
It's time for a new term: a "Pegasus" (a different kind of mythical horse than a unicorn): https://twitter.com/jgrahamc/status/658702918200250368 Pegasus (n) 1. Mythical winged horse; 2. Silicon Valley 'unicorn' with high gross margin. i.e. one that might actually take off.
A pegasus doesn't have a horn. A flying unicorn is usually called an "alicorn" but also pegacorn, unisus, or unipeg. /pedantic
On a separate matter, I would prefer to not use either term, but people love these convenient categories.
Earlier quoted context omitted.
A pegasus doesn't have a horn. A flying unicorn is usually called an "alicorn" but also pegacorn, unisus, or unipeg. /pedantic
Maybe jgrahamc already edited his comment, but I don't see that he ever said a pegasus had a horn. On a separate matter, I would prefer to not use either term, but people love these convenient categories.
>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.
>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.
Earlier quoted context omitted.
And some of those articles were from 1998 . It can take a long time for a bubble to burst. I remember hearing about the housing bubble in 2001. It even made the front cover of the Economist in 2005. As Keanes said "The market can stay irrational for longer than you can stay solvent".
As a rule, bubbles only burst after everybody gives up on claiming they will.
Earlier quoted context omitted.
A pegasus doesn't have a horn. A flying unicorn is usually called an "alicorn" but also pegacorn, unisus, or unipeg. /pedantic
Maybe jgrahamc already edited his comment, but I don't see that he ever said a pegasus had a horn. On a separate matter, I would prefer to not use either term, but people love these convenient categories.
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't a surprise that it did, just that no one knew precisely when it would. My point is that arguing that people have said this bubble was about to burst and that it hasn't yet isn't an argument that it won't.
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.