There's an insightful article on TechCrunch "Will the Bubble Burst? Ask Your Cabbie" that I found interesting. The author recounts the first Internet bubble and then the credit/real estate bubble and how he realized that the markets were overvalued at these times and how he avoided the market downturns. From that experience, he then looks at the current environment. It's a good article and worth a read.
The PE Hub article "Reading the venture tea leaves for 2016" by Elizabeth "Beezer" Clarkson examines some recent trends in the venture industry and predicts how they may play out in 2016. The main take-aways are:
There are now over 170 "Unicorns" - venture-backed companies valued at over $1 billion - and recent tech post-IPO performance and market volatility suggest that many of these unicorns may have difficulty going public at their current valuations. The Fortune article "Silicon Valley's $585 Billion Problem" explores the unicorn phenomenon, looks back at tech unicorn post-IPO performance, discusses the slow-down in tech IPOs and the negative feedback loop created when IPOs trade below their IPO prices. The article discusses the IPO process and talks about the IPO pricing and the "pop" from the IPO price to the initial trading price. Having been an investment banker, I disagree with the characterization of investment banks in the article and I believe the article adopts a cynical view of the IPO process. Having said that, I believe there are some good take-aways from the article:
Has the general stock market anxiety carried over to venture capital? That's the question posed by the Forbes article "Everything You Need To Know About A Possible Slowdown In Venture Capital Investing." This interesting article explores 2015 funding levels and the current funding and valuation environment. It's worth a read.
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