Is Silicon Valley in Another Bubble . . . And What Could Burst It?
With the tech industry awash in cash and 100 “unicorn” start-ups now valued at $1 billion or more, Silicon Valley can’t escape the question. Nick Bilton has written a great article for Vanity Fair that questions whether the Valley might be in another bubble right now…
“…Ironically, whenever the kaboom happens, and in whatever form it takes, the people who are most protected will be the V.C.’s themselves. Most of them learned their lesson from the last bubble, and this time around have set up deals to ensure that if a company goes under, or has to sell itself for parts, any leftover money will go directly into their coffers—to “make them whole,” as the saying goes in the Valley, ensuring the investors get back what they put in. This doesn’t protect the hundreds of thousands of people who now rely on a paycheck from the errand-running start-ups or taxi disrupters. Nor does it help the mom-and-pop businesses that have bought into the hype of Zynga, Yelp, or Twitter, and invested their savings, which continue to plummet.
But don’t worry. This time is different?