For those concerned about a bubble in startup land, the number of VC-backed companies attracting valuations north of $1 billion increased sharply this year. “This clearly is shaping up to be the best year for IPOs in a decade,” said Steve Case, the former head of AOL and now head of his own private investment firm, Revolution. IPOs are at the core of U.S. and global economic growth and job creation. A sustainable IPO market requires valuations based on fundamental performance over the long-term. Today’s markets are focused instead on short-
term trading profit extraction. A bubble or the beginning of a new, higher trend? You be the judge.
You may disagree on whether Dropbox is worth an estimated $9.6 billion, Pinterest, $3.8 billion, or Uber, $3.5 billion. But you will agree on this: All are rich valuations and a surge of pre-IPO money is fueling them to extraordinary heights.
“This is momentum investing,” said Tim Guleri, managing director at Sierra Ventures. “Overall, too much o
