Thursday, October 22, 2015

Mark Suster's "Venture Outlook 2016"

Posted By: George Deeb - 10/22/2015


& Comment

We just read Mark Suster's recently published "Venture Outlook 2016" and needed to share it with all of you.  Mark is a successful serial entrepreneur turned venture capitalist at Upfront Ventures, and author of the Both Sides of the Table blog.  Mark's post, linked above, is jammed packed with great stats about recent tech valuations and whether or not we are in the middle of another internet bubble, with valuations ahead of themselves. SPOILER ALERT:  Mark says we are.

Directly quoting Mark's high level outlook for 2016:

  1. "I suspect 2016 will be the year that the over heated private tech markets cool but I’ve been saying that for 2 years so who the fuck knows. I do know the markets are over valued but one individual actor can’t change market prices, which is why the Bin38 scandal was always a red herring. I will keep funding early-stage technology companies who have a vision to fundamentally change some part of an industry over a normal (8-12 year+) time horizon. There are no quick bucks in venture outside of bubbles.
  2. We will continue to see over-funding of late-stage venture financings until the bloom comes off the rose and then I predict rational non-VCs will return to their day jobs chasing returns in other corners of the financial world and we people who only know how to do venture will continue doing just that.
  3. The rise of crowd-funding as a viable alternative to VC will continue to grow unabated. Too much capital will be allocated to this channel relative to its value until the next downturn when many unsophisticated investors will be burned or until the SEC begins to crack down on the less reputable platforms or investors in these platforms. I suspect this won’t pop until after 2016 when retail investors tire of the promise of easy money in tech.
  4. In the meantime, the arc of technical progress will continue whatever the interim valuation scorecards of startups show. Technology continues to have profound impacts on society and industry and will continue to capture an increased portion of the total economic pie. And I suspect for the long-term venture capital will play an important role in helping support great entrepreneurs."
Be sure to also read Mark's great SlideShare presentation on this same topic:

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