Quoted: Dave McClure talks tech bubble, unicorns and dinosaurs

“Unless they innovate more rapidly (or acquire their internet peers), expect most S&P 500 Dinosaurs to be disrupted and destroyed by an endless march of VC-funded Unicorns that will bash their tiny little reptile brains in with software and internet marketing.”

Dave McClure, angel investor and founder of 500 Startups, is on team unicorn. In a Medium post tiled “Bubble, My Ass: Some Unicorns Might Be Overvalued, But All Dinosaurs Gonna Die,” McClure says that while there’s a lot of talk about startups being overvalued — startups valued at $1 billion or more as known as unicorns — many public companies, which he calls dinosaurs, are “substantially overvalued as well.” He says the average dinosaur’s P/E ratio of 15 to 20 is too high, because investors are assuming the companies will continue to rake in the same amount of cash and profit for the next 15 to 20 years. But he says — and we’re paraphrasing here to avoid repeating some expletives — unicorns are going to kick dinosaurs’ butt in the next decade. He points to the letter Jamie Dimon wrote to investors last week in which the JPMorgan CEO warned that “Silicon Valley is coming” to disrupt the banking industry.

Photo: Bob Andres/Atlanta Journal-Constitution, MCT Archives

 

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