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This is brutal. I know someone at Square that exercised his options, and I guess he is underwater by a massive amount now. And since VCs are generally move li
by steven2012 11y ago
This is brutal. I know someone at Square that exercised his options, and I guess he is underwater by a massive amount now. And since VCs are generally move like flocks of birds, this will likely create a massive chill in terms of funding. Either they are going to take a pound of flesh from the founders coming for their next round of funding, or they will just pull away.
It looks like 2016 is going to see a lot of unicorns take a massive hit. You can bet Stripe and other payment companies are going to take a hit to their valuation, although Stripe seems pretty well-funded at this point.
- brwnll 11y agoI assume you are referring to follow up rounds when you refer to a chill? Or do you expect angel/seed funding to be reduced because they are going to lower guesstimated valuations? Will be Interesting to see if this pattern has an effect of pushing tech companies to IPO sooner. Is this behavior being replicated cross sector? It seems commonplace for a tech company to write down a valuation of a purchased company (eg every company MS has ever bought), I don't hear about it in health, finance, retail, etc sectors.
- chkuendig 11y agoYou might not have heard about it, but most companies write down the value on acquisitions to some degree. IANAL, but legally you can be forced to realize tome deprecation on goodwill payments... https://en.wikipedia.org/wiki/Goodwill_%28accounting%29 https://en.wikipedia.org/wiki/Goodwill_%28accounting%29