The technology bubble is blown away. Investors overestimate the risks

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About a year ago, venture capitalist Bill Gurli announced a change in the course of investment. In his opinion, investment in technology companies is an excessive risk. Now, according to Gurli, other investors come to the same conclusion, Vedomosti writes. Bill Gurli gave a detailed interview to The Wall Street Journal WSJDLive, during which he reported on startups that lower their own estimates for the expected funding. As for mutual investors, they reduce the cost of their packages in technology companies.

Now Gurli believes that investing in technology companies requires great care. After several years of very rapid growth of many startups, and both the volume of investments and the spending of such companies have grown, they still have no clear way of making a profit. And now, venture funds have a rather unfortunate period, which is associated with a low level of return on investment. Many private companies refuse to IPO, and startups cost much more than what larger technology companies can count on.

The Benchmark company, whose main partner is Gurli, has invested and made deals much less than all the past ten years. One of the main problems of Silicon Valley is the unwillingness of managers to make their companies public. Accordingly, startups are not being studied by investors in the public market - those who want to invest money simply do not have a reliable tool for monitoring the financial condition of a private company.
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No matter how much a private company is valued, investors cannot get an investment until a startup goes to an IPO. The company's liquidity can be the only real assessment of any startup, according to Gurli, and all private evaluations are just numbers on paper.

At the very beginning of the work of the Uber service, Benchmark was one of the first investors of the service. Currently, Uber is one of the most expensive private companies in the world, valued at $ 51 billion. Benchmark has also invested in coworking startup WeWork Cos., Which is leasing office space. And now this company is already valued at $ 10 billion, which is very surprising for the investor.

The low level of interest rates on loans allows investors to invest in private technology companies, which allows the latter to keep a high estimate for a long time. If the rates do not change in the near future, then volatility can be seen. In any case, Gurli thinks so.