Dec 21, 2018

How a tech correction could affect startups, per venture capitalists

Photo: Ramin Talaie/Corbis via Getty Images

There's been a bit of correction in public tech stocks lately amid a larger market slump, and although Silicon Valley venture capitalists are telling Axios it could impact later stage companies who haven't been performing well, most founders will likely go unscathed.

The big picture: "Having a bit of air let out of the balloon could be a good thing," IVP partner Jules Maltz tells Axios. And having it happen on the private side also wouldn't be bad, adds another VC.

The takeaways:

  • Doesn't matter for the very young companies. Early stage startups are years away from maturity, says Menlo Ventures partner Venky Ganesan.
  • For later stage companies, it might reveal gaps: "You cannot work under the assumption that there’s easy money in the future," said Ganesan. "When the tide is in, everything is great, but when the tide goes out, we get to see who is swimming naked. ... So you’re gonna see companies that have not been performing so well not get rewarded."
  • But if you're a great company: Everything's gonna be fine, said all the VCs. Top private companies will be able to raise or go public, they confidently said (and not surprisingly).
  • And frankly, it won't affect most founders, a top Silicon Valley VC told me a few weeks ago. "When the market goes up founders look up... the private market valuations go up at the same time. ... When the market crashes, nothing happens with founders."

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  1. Global: Total confirmed cases as of 11:30 a.m. ET: 5,618,829 — Total deaths: 351,146 — Total recoveries — 2,311,404Map.
  2. U.S.: Total confirmed cases as of 11:30 a.m. ET: 1,681,793 — Total deaths: 98,933 — Total recoveries: 384,902 — Total tested: 14,907,041Map.
  3. Public health: Fauci says data is "really quite evident" against hydroxychloroquine — Nearly half of Americans say someone in their household has delayed medical care.
  4. Tech: Zipline drones deliver masks to hospitals; vaccines could be next
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  6. 🏒Sports: NHL unveils 24-team playoff plan to return from hiatus.
  7. What should I do? When you can be around others after contracting the coronavirus — Traveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
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Updated 1 hour ago - Politics & Policy