Bill Gurley to Unicorns: Winter Is Coming. You Ready?

Tech stocks have been taking a beating lately, and venture capital investor Bill Gurley of Benchmark thinks it’s a sign. If the valuations of public tech companies are compressing, private market valuations might be next.

In a tweetstorm Thursday night, Gurley warned startup unicorns — companies that are valued at more than a billion dollars — to prepare for leaner times.

“We may be nearing the end of a cycle where growth is valued more than profitability,” Gurley said on Twitter. “It could be at an inflection point.”

The note of caution isn’t a new tune for Gurley — he warned of impending tech bubble casualties during SXSW last year, saying 2015 would bring “dead unicorns.” His tweetstorm was reminiscent of investment firm Sequoia’s infamous “R.I.P Good Times” slideshow from 2008, which warned startups to spend every dollar as though it were their last.

In the recent frothy market, founders have been encouraged to care about speedy growth above all else — including profits. Since interest rates have stayed low and money has flowed ceaselessly from venture investors, private equity firms and mutual funds, many startups have been able to use their giant piles of cash raised to subsidize services that might not otherwise be financially tenable. Even Uber’s financials, as leaked to Gawker, placed a high priority on growth at the expense of profit.

But with the changing tide of the public market, investors may start demanding to see more viable, self-sustaining businesses from companies before agreeing to back them. “Can you get to profitability on your last round?” Gurley rhetorically asked the twittersphere. “Have you even considered such a reality?”

It’s a tough balance to strike. For many companies, if they prioritize profitability over growth too soon, they could risk losing market share to competitors spending to get more users. But if they’ve built their entire business on a ravenous cash-eating machine, they might be screwed when R.I.P Good Times arrive.

See Gurley’s entire tweetstorm below:
https://twitter.com/bgurley/status/634572345240240129
https://twitter.com/bgurley/status/634572421261950976
https://twitter.com/bgurley/status/634572504384704512
https://twitter.com/bgurley/status/634572609137438720
https://twitter.com/bgurley/status/634572713168793600
https://twitter.com/bgurley/status/634572835659214848
https://twitter.com/bgurley/status/634572974067085312
https://twitter.com/bgurley/status/634573025329807360

This article originally appeared on Recode.net.