Now's Not the Time to Make a Big Bet on Startups
Recent financial trends suggest that startups are getting risky
The past couple of months in the business world have offered a good reminder that the fundamentals still matter—and that’s even the case for companies built around technology, where the rules often feel different.
WeWork has been the poster child for this. An attempt to go public on the stock market turned into a five-alarm disaster for the company, leading to a leadership shake-up and raising concerns that other “unicorns” without margins to back up their billion-dollar-plus valuations will come crashing to earth in the coming years. Even big names, like Uber.
Now comes word that WeWork, the largest tenant of office space in many big cities, could be out of cash in a month if it doesn’t get fresh investment. Beyond posing an immediate concern for associations with WeWork leases, I’m worried about what the company’s woes could mean for other startups that associations increasingly rely on.
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