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So after such market correction in how investors value startups and software business in general, I suspect that there will be a starkly different valuation mod
by notastartup 12y ago
So after such market correction in how investors value startups and software business in general, I suspect that there will be a starkly different valuation model, one that relies on net positive cash today and the prospect of net positive cash in the next quarter.
Spending cash as soon as they come in won't be good enough for the next group of investors, to further weed out the cash burning companies, they will look for a more conservative and cash positive businesses.
This would impact consumer centric startup models where valuation comes from having a large userbase more. Companies that pursue businesses wallets will have a more favorable valuation, possibly a lot larger than what was previously thought.
Looks like a good future but not so much for if you are building the next facebook. Those days of sustaining high user base with little to no paying customers are gone. Market will no longer place favorable valuation on such operations.
This is just what I'm predicting of course.