Silicon Valley is cooling, not crashing. Valuations are falling. The era of cheap money is over.
Silicon Valley’s Cash Party Is Coming to an End
“The cheap capital party is over, but there are a few drunk sailors who didn’t hear last call.”
Dominik Pabis / Getty Images
Based on interviews with about two dozen venture capitalists and tech investors, 2016 is shaping up to be a year of reckoning for scores of technology startups that have yet to prove out their business models and equally challenging for those that raised money at unjustifiably high prices.
“It’s been surprising to see how quickly valuation expectations are recalibrating,” said Craig Hanson, a partner at Next World Capital in San Francisco. “Rounds will be harder to raise, valuation multiples will be lower and, in many cases, companies will have to demonstrate metrics that back up the big projections they promised before.”
This article originally appeared on Recode.net.
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