The world is a chaotic place right now with riots in London, biggest ever one day falls on American stock markets, debt downgrades in the US and unprecedented steps from the European Central Bank to bail out the peripheral Eurozone economies all happening in the last week. The catalyst for these events has been the declining prospects for economic growth and I was asked this morning in an interview with the Guardian what I thought the impact will be on the startup world and the tech bubble that we are in at the moment (I will post a link to the podcast when it is online).
Thinking about it at the time, and in subsequent conversations my view is as follows:
- Tech valuations have recently been spiking up to levels that aren’t sustainable in the long run.
- Those valuations have been driven by the IPO market and if the current public market turmoil continues the flow of new IPOs will dry up and those that do make it through will be at lower valuations. VCs value private companies in part by looking at public market valuations and hence the lower valuations will trickle down to startups.
To read the full, original article click on this link: Keeping going through the turmoil « « The Equity KickerThe Equity Kicker
Author: Nic Brisbourne
