Skip to navigationSkip to content

The VC Bubble Is Putting Established Companies at Risk

By Barron's

Read full story

Comments

  • Also share to
  • Jeff Chau
    Jeff ChauFounder/CEO at gamegether, inc

    Like how this article connects the macro dots so-to-speak to explain the huge amount of venture capital pouring into so many startups and how it's about revenue instead of profits.

    I believe this has impacted my industry, the Esports industry. A slight correction is starting to happen because hyper-growth market like esports has lots of noise so it's hard to determine who are the real horses, the contenders, in the race and who are the pretenders. Esports startups and orgs are being valued at 12-20x

    Like how this article connects the macro dots so-to-speak to explain the huge amount of venture capital pouring into so many startups and how it's about revenue instead of profits.

    I believe this has impacted my industry, the Esports industry. A slight correction is starting to happen because hyper-growth market like esports has lots of noise so it's hard to determine who are the real horses, the contenders, in the race and who are the pretenders. Esports startups and orgs are being valued at 12-20x their revenues where tech startups are valued at 10x revenues. Which is interesting because most of these esports companies aren't using tech in any way to massively scale like tech companies can.

    And great point about how Amazon, Facebook, and Google are benefiting from such flush capital funding all these startups and companies--when the correction comes, I wonder how much of their revenues will be impacted.

    This isn't remotely as close to the dot-com bubble size but still a bubble.

  • Dustin Blake
    Dustin BlakeRaconteur at Making Government Smarter

    This explains the insanity of all the VC fueled startup/tech insanity. It ripples through and affects more established companies.

    Unfortunately, it also has a much more damaging impact upon ‘regular’ people, and the many communities in the Bay Area. All these startups pay their engineers incredibly well to make sure that they employ as many as they “need.” They need a place to live, and housing in the Bay Area is in short supply. A desperate techie making $150k+ a year can bid up an available apartment

    This explains the insanity of all the VC fueled startup/tech insanity. It ripples through and affects more established companies.

    Unfortunately, it also has a much more damaging impact upon ‘regular’ people, and the many communities in the Bay Area. All these startups pay their engineers incredibly well to make sure that they employ as many as they “need.” They need a place to live, and housing in the Bay Area is in short supply. A desperate techie making $150k+ a year can bid up an available apartment, offering more than a teacher, nurse, police officer, and much, much more than just a regular service industry worker. Just in the last 10-12 years, rents for a 1BR have gone from $1700 to $4500+, and landlords have made serious bank off the tech boom—in fact, they appear to be the only for-sure winners.

Want more conversations like this?

Join the Quartz community for all the intelligence, without the noise.

App Store BadgeGoogle Play Badge
Leaderboard Screenshot

A community of leaders, subject matter experts, and curious minds bringing nuance back to how we talk about the news.

Editors' Picks Screenshot

No content overload: our editors will curate the most notable and discussion-worthy pieces for you every day.

Share Screenshot

Don’t just read the story, tell it: contribute your ideas and experience to the dialogue.