In the last seven months, the venture / entrepreneurial world has gone from “the only thing that matters is massive growth” to “the world is going to end.” For perspective, all you need to do is look at a dozen high-flying IPOs from 2020 or 2021 to see that the peak happened just before Thanksgiving.
The private markets lag the public markets. That’s not new. This time around, the lag was about a quarter, as many VCs started to talk about what was happening around the beginning of Q2.
There is no doubt that we are in the middle of, well, whatever you want to call it. “Correction” and “Choppy Waters” is probably a generous phrase for what is going on.
Having lived through this as an entrepreneur in 1987, an entrepreneur and VC in 2001, a VC in 2008, and a VC today, I embrace that this is just part of the entrepreneurial and economic cycle. I also know that many people freak out at this moment. If you’ve never been through this (like I hadn’t in 1987), it can be terrifying. If you are experienced and suddenly find yourself caught flat-footed for any number of reasons, it can be equally terrifying.
I no longer believe in clichés or prognostications such as “make sure you have three years of money in the bank” or “do a RIF quickly and deeply regardless of the situation you are in.” Instead, I think it is crucial for each company to understand its (Read more...)