As Silicon Valley entrepreneurs dream up ways to disrupt the financial-services business, bankers and Wall Street companies are taking patents very seriously.
VC Mark Suster explains:
There is much discussion online and also in small, private groups, about why the price of technology companies – public and private – are falling. Valuing any company can be difficult because it requires a degree of forecasting future growth & competition and ultimately the profits of the organization.
And two big changes have happened that are widely known – in the past quarter the value of some very high profile companies such as LinkedIn and Twitter have fallen substantially plus Fidelity (usually a public market investor) has written down the value of many of it’s later-stage private-company investments and made the downward valuations known.
Most venture capitalists who have been in this business for a long time foresaw this correction and have been talking about it privately for the better part of the last year or two. I’d like to explain as best I can my opinion on what is going on because most of what I hear from entrepreneurs is not only wrong but is reminiscent of what I heard in 1997-2000.
VCs have pumped up the value of the “unicorn” startups. Now tech IPOs are in trouble.