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Dizzying Ride May Be Ending for Startups

nytimes.com

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Re: Dizzying Ride May Be Ending for Startups

#31

Post by paragpatelone »

dgreensp wrote: post #26

Sam Altman has already explained why late-stage private valuations -- but not earlier-stage or public valuations -- are bubble-like right now: >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 misunderstand…

There is a bubble at the seed stage. There are tons of people (accredited investors) investing that stage and tons of incubators/accelerators to help introduce those startups to those investors.

Platforms like Angel list are helping fund allot more companies at the seed stage by having syndicates.

Now even non-accredited investors will be able to invest in startups[1]. So the seed stage is bubbling up.

http://www.usnews.com/news/business/articles/2015/10/30/sec-...

Re: Dizzying Ride May Be Ending for Startups

#32

Post by austenallred »

hvs wrote: post #14

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.

A good strategy as an analyst is to predict a downturn coming. You can be wrong for six or seven years, and then if/when there is a downturn you say, "I told you so!"

Re: Dizzying Ride May Be Ending for Startups

#33

Post by spyspy »

Alex3917 wrote: post #23
idlewords wrote: post #15

Earlier quoted context omitted.

The fact that our roads are crappy is going to turn people into shut-ins?

Basically, yes. I think better examples though would be: - 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 educati…

This is some wild speculation.

Re: Dizzying Ride May Be Ending for Startups

#34

Post by vincent_s »

rdlecler1 wrote: post #2

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/ratchet, then SnapChat is now valued at $462M floor, not $15 billion.

What about other investors who also have liquidity preferences?

Re: Dizzying Ride May Be Ending for Startups

#38

Post by bsg75 »

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.

The current state of highly educated people looking for get rich quick schemes (unicorns) is tiresome.

Re: Dizzying Ride May Be Ending for Startups

#39

Post by xienze »

austenallred wrote: post #32
hvs wrote: post #14

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.

A good strategy as an analyst is to predict a downturn coming. You can be wrong for six or seven years, and then if/when there is a downturn you say, "I told you so!"

The thing is though, there are just as many people saying "it's different this time". The person predicting a downturn will inevitably be right. The other person... not so much :).

Re: Dizzying Ride May Be Ending for Startups

#40

Post by axis967 »

I think there are far too many startups that focus solely on growth/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.
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