GenuineVC David Beisel's Perspective on Digital Change

June 8, 2005

Marc Goldberg wonders, “Is the bubble back?” While it is always difficult to discern the size of a storm from the inside, we should consider a few questions:

Are venture deal median prices increasing? Yes.

Are the newspapers filled with stories about Silicon Valley entrepreneurs looking to get even richer? Yes.

Have we seen recent high-profile triple-digit acquisitions? Yes.

Are internet companies’ stock prices rivaling “traditional” media companies’? Yes.

But…

Has the Nasdaq gone through the roof in the past few months? No.

Is there so much hysteria that MBAs are leaving their cushy consulting jobs in droves to start companies? No.

Have we lost a sense of grounding that we’re proposing new valuation metrics? No.

Is everyone partying like it’s 1999? Not yet.

No, I would argue that the bubble isn’t back just yet, though Jeff Bussgang wonders if it is coming. Yes, I agree that there is a lot of excitement in the air, but that doesn’t necessarily mean that we are in or are entering a bubble.

I am not saying that there aren’t investments currently being made with unrealistic expectations. Nor am I saying that companies are being funded at extremely lofty prices. Nor am I saying that there are companies being funded that won’t survive. It’s all part of the business.

What we’re in is a rejuvenation. After a cold winter, the internet is back. And in comparison to a couple years ago, things feel great. Heidi Roizen announces this fact in none other than a podcast. It’s indeed a new era, but not a bubble – yet.

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  • David Beisel
     - 12 hours ago
    Cool to have the @seedcamp crew in town camped out at our offices today... loved the energy. http://t.co/eF9b9TYLZg
  • Rob Go
     - 20 hours ago
    So, main lesson. Founders of great companies don't get too excited when momentum is high and fight ferociously when times are tough
  • Rob Go
     - 18 hours ago
    RT @joshk: I can't wait to see @MagicLeap. (They raised more money in this one round than @firstround has invested in 10 years across 250+…
  • Rob Go
     - 20 hours ago
    Also important to keep in mind that a lot of great companies struggled in the valley of death but fought their way to the other end

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