X-Post: For Tech Startups The Party Is Over

https://discussion.fool.com/wsj-for-tech-startups-party-is-over-…

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

https://archive.ph/cwXm6

“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.”

2 Likes

During a bear market and while interest rates are rising, you expect investors to be more cautious.

How long will the Feds continue to raise interest rates?

How long does a bear market last?

The sun will shine again one day, just not right now.

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The feds will raise until we are On the cusp of or in recession.

Most bear markets are over in two years or so, it just feels like five.

On the other hand …

Jk

3 Likes

How long will the Feds continue to raise interest rates?

How long does a bear market last?

The sun will shine again one day, just not right now.

Fed had done one rate hike and I expect they will raise the Fed fund rates to at least up to 2.5% ~ 3%, and then there is QT.

It may be few quarters or few years.