While there is a lot of hoopla around entrepreneurship the world over, two trends seem to be heating up:
- Reducing valuations of high growth ventures
- Slowing down of venture investments
I personally see this as a positive thing. Like all things in the world, entrepreneurship and associated investments go through ups and downs. During the ‘down’ phase there is a tendency for situations to become closer to normal. I think this is happening to this sector.
Reducing valuations is also good. This reduces the pressure on the entrepreneurs while also keeping valuation close to value creation (read more on the difference here).
I recently came across an article that spoke of the virtues of a possible decline/slowdown in Venture Capital (VC) Funding. Link: http://knowledge.wharton.upenn.edu/article/how-entrepreneurs-can-weather-the-drop-in-vc-funding/?utm_source=kw_newsletter&utm_medium=email&utm_campaign=2016-05-04
Think about it.