WSJ Headline: For Tech Startups, the Party Is Over
Subheadline: Funding is suddenly scarce as venture capital firms grow stingy, forcing young companies to get frugal and focus on breaking even
By Heather Somerville
May 16, 2022 10:12 am ET
“If you keep marking everything up, you’re eventually going to believe that those marks are accurate,” said Gil Dibner, a London-based venture capitalist.
Startups that raised big sums at high valuations faced pressure to grow, which they did by rapidly adding staff and making acquisitions. At some companies, the quality of work deteriorated, acquisitions weren’t thought out, leadership got distracted and cash burn soared, said some investors and startup founders.
“It was a scrum,” said Mr. Dibner. “When you shove that much money at pretty much anything, you change the way people make decisions.”