Silicon Valley Shaken as 19 Startups See Their Valuations Slashed

http://www.vanityfair.com/news/2016/02/silicon-valley-shaken-as-19-start-ups-see-their-valuations-slashed

by prostoalex • 10 years ago

22 9 10 years ago

chollida1• 10 years ago

I don't think this is worthy of being a story anymore.

Remember that as public companies, GOOG, MSFT, FB, etc are all marked up and down many, many, many times a day.

Private companies can't be marked by a market so they get evaluated much less often, usually once a month to once a quarter depending on what type of firm owns them.

As someone who has gone through how to evaluate holding equity in a private company, I can say its really an exercise in two things:

1) what will your auditor allow, this usually has lots of wiggle room and they are just looking to see if you can justify your valuation.

2) What you can sell if for. This usually is the more stringent requirement.

Most of the time it really doesn't matter as you don't/can't liquidate your holding in 30 days. But it can become an issue if you have a large redemption.

See a Matt Levine writeup on this where CPP sued a famous hedge fund for writing down some non liquid debt during the period where CPP wanted to redeem and then marking it back up in the months after they redeemed.

http://www.bloombergview.com/articles/2015-09-28/bond-prices...

prostoalex• 10 years ago

Is it wrong to assume that investors of Fidelity's size have access to company's metrics, and whatever metrics they were tracking in their valuation model are under-performing compared to expectations?

javery• 10 years ago

"First Round's Fred Wilson" - how do you get this wrong?

3327• 10 years ago

The markdown / write off party begins.

Here is advice from someone who mentors and invests in many startups and echoed also by PG:

All the $ in the world will not be able to buy back the chance/time concerning whats possible in your early 20's such as backpacking around the EU or hiking in India.

My two cents.

aaroninsf• 10 years ago

Or late 20s.

The best thing I ever did was turn down a management path cherry job to take a leave absence and, uh, backpack around the EU then hike in India.

I was supposed to be gone 3 months.

I came back after 10 to a new life.

Best thing I ever did!

* except also somehow convince my wife to wait it out for me those same 10 months. We now have two girls in SF public school.

trav4225• 10 years ago

...or 30s or 40s or...

withdavidli• 10 years ago

Only 12 new start-ups reached unicorn status in the last three months of 2015.

You mean less people are doing whatever they can to get valuations at exactly $1 billion? fortune.com/unicorns/

officialchicken• 10 years ago

But how are the dragons doing in contrast? I never see any news about them anymore. I presume they're just fine, and boring success isn't newsworthy. I'd love to see how wide the gap exists between the dragons and the unicorns now vs 2013/14, and what we can learn from that rather than obsessing over the 'corns.

cylinder• 10 years ago

Dragons?

Silicon Valley Shaken as 19 Startups See Their Valuations Slashed

Related Stories