We still have one, two or three very good years ahead. But then we should be cautious, because there s no example in history where the cycle doesn t come to an end and drag us through a very painful period.
— Adam Valkin, a partner at VC firm General Catalyst Partners, talked about today s tech boom during a Harvard Business School venture capital conference Sunday. The New York Times notes that a big focus of the discussion was how and when the boom would end.
Kate Mitchell, a co-founder and partner of Scale Venture Partners, in a separate discussion recounted how a startup in her portfolio lost its chief technology officer after a $1 million-plus offer from Oracle. If not a bubble, it s at least warm in Silicon Valley, she said, according to the NYT.
Other VCs have been sounding an alarm, talking about rising burn rates, the rate at which companies are burning cash. I wrote in the fall that Benchmark Capital partner Bill Gurley predicted some high-profile failures in the next year or two.
But back to the now, and the boom, which is everywhere you turn — from outsized funding rounds to spectacular valuations. I wrote a couple of weeks ago about a Fortune article that looked at the herd of unicorns in tech — startups with valuations of $1 billion or more. One VC said venture investors are now looking at decacorns, or startups they think could reach valuations of $10 billion or more. (Think Uber, Palantir Technologies and more.)
So is it time to rush to the venture capital industry? After all, the IPO market is expected to be hot in 2015, our own Heather Somerville wrote. But the NYT quotes David Friend, a principal at Bain Capital Ventures, who suggests starting a company is a better idea. Take advantage of this funding environment, and go take money from us, Friend said. We ll give money to anyone. Somebody will give you money.
Illustration from MCT archives
