The idea that WeWork’s failed IPO wouldn’t impact the broader startup markets was based on the point that the company was such an outlier, that extrapolating too much from its single data point would be an error.
A new post from well-known entrepreneur and venture capitalist David Sacks draws a very different sketch of WeWork, its possible impacts, and where the market is today.
The topic du jour in tech right now is the sudden reappraisal of some high-flying startups based on unit economics/gross margins (e.g. WeWork, Uber, Lyft, DoorDash, Postmates, etc).
[…] The public market’s verdict on WeWork and other gross margin-challenged companies has trickled down to growth and venture investors.
Here at Crunchbase News, we’ve covered lots of positive signs in the startup market and the surrounding halls of capitalism.
Sacks does go on to say that his pronouncement, this window into the world of growth capital and its new expectations, is “not a bad development for our industry or for founders who want to build real businesses.”
Signs of some issues in the late-stage market have cropped up in recent weeks.
What Sacks has done is make it perfectly acceptable now to be rather skeptical of the late-stage (growth, if you want) market in the world of private capital.