Stumbles at Uber and WeWork Don't Mean the End of Tech
Venture capitalists face the same challenges as ordinary investors
It would be an understatement to say that it’s been a disappointing few months for some high-profile Silicon Valley darlings. Shares of Uber, Lyft, and Peloton are trading below the prices of their initial public offerings. WeWork and Endeavor have postponed plans to go public.
Of course, venture capital investors who bet early on these companies have made many times their initial investments. But later private investors haven’t fared so well, and those who bought shares after the IPO have done worse. The cold response of the public market to what had been lauded as success stories raises questions about the health of both markets and the viability of many companies that survive the arduous culling from startups to public companies.
Those questions should be asked, not just now but always. Is the market at peak and about to fall? Are Silicon Valley venture investors overestimating the value of their companies? If so, are both private and public markets out of whack because years of cheap capital allowed venture funds to slide into carelessness? The recent high-profile flops would seem a cautionary tale, but there are also reasons not to take these stories as a leading indicator.
Please select this link to read the complete article from Associations Now.