Not so hot anymore! Silicon Valley’s hottest startups lost about $100 billion in value this year. Investors are now pretty skeptical over cash-burning companies with no clear path to profitability.
The IPO market was on fire earlier in the year, but now, the companies are up in flames.
- You promise? Investors want more than big promises. The scooter sharing company Lime had to rethink their entire business plan to show they can turn a profit.
How Does It Affect My Wallet?
In Their Own Words: Silicon Valley money-man Chris Douvos summed it up best: “We’ve been in the middle of a rollicking party that’s gone on for five years and someone has snapped on the light switch…That’s how Silicon Valley feels right now.”
A healthy dose of doubt never hurts, especially when it comes to investing. Unless you were the one buying IPOs and are now underwater…
Big red flag = no clear path to profitability.
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