According to Reuters, tech companies saw $15.3 billion worth of investments in the second quarter of this year. This was a more than 20 percent increase in total investments compared to the first quarter, and 4th highest dollar amount since the year 2000. But what exactly is driving this growth in the face of such recent declines?
I wrote about this topic on my blog recently. Check out the full story; I’d love to hear your feedback.
In July of this year, The Mercury News reported that Uber was facing more than 70 federal lawsuits throughout the United States. While the company is likely to incur expenses due to the cost of fighting these in court (as they had done with at least 60 other cases), that is not their biggest problem. The uncertainty of legal outcomes coupled with the negative association of having done something unlawful. Given that the company has lost more than$1.2 billion in 6 months, this is a major problem.
No one goes into business without looking to be profitable; great ideas could be just that without the additional efforts to establish and run an enterprise of some sort. Yet, once the decision has been made to set up shop, and money and time have both been spent to bring plans to fruition, to not want to regain at least some of that and more–to turn a profit–would be silly. Afterall, no business can survive otherwise. Still, it’s important to know that profit alone is not the only objective for businesses to consider when it comes to attracting investors. …
For many investors in private, pre-IPO technology the recent return of fear was overdue and taken in stride. However, the growth in late stage start-ups and the increase in late stage start up investing have changed the volatility and attitudes in the market. We saw large slides in the public company comparables that many use to judge the valuations of pre-IPO firms. These slides and a widespread sense of overdue draw down in valuations, combined with jitters driven by recently expanded ranks of private technology investors, created a partial swoon. This allows us a rare and valuable chance to look back and learn from a stress test.
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