About 20% of Tech Startups Worth More Than $1 Billion Will Fail, Accel Says (theedgemalaysia.com) 33
An anonymous reader shares a report: There are more than 1,000 technology unicorns, meaning venture-backed companies worth $1 billion or more, but at least one in 5 are likely to fail, said Rich Wong, a partner at venture capital firm Accel Partners. "I think maybe out of that thousand, 20% fully die. The end," Wong said on Thursday at the Bloomberg Tech conference in San Francisco.
The estimate reinforces what's become a grim calculus for many companies. Tech start-up valuations soared during the 2021 pandemic boom -- before crashing back to earth, as interest rates rose and venture capital investments fell. Of the companies that don't fail, about half will be stuck -- muddling along without being able to grow bigger or go public, Wong said. Some of those may "ultimately have reality set in," and sell themselves for lower prices than once seemed feasible. Others, not quite failing, "will be a bit zombie-ish and grind on," he said.
The estimate reinforces what's become a grim calculus for many companies. Tech start-up valuations soared during the 2021 pandemic boom -- before crashing back to earth, as interest rates rose and venture capital investments fell. Of the companies that don't fail, about half will be stuck -- muddling along without being able to grow bigger or go public, Wong said. Some of those may "ultimately have reality set in," and sell themselves for lower prices than once seemed feasible. Others, not quite failing, "will be a bit zombie-ish and grind on," he said.
Merely one in 5?? (Score:2)
If only 20% fail, the rest only need to average 20% growth for investors to break even.
And if at least 2% of them go up by a factor of ten, it's a win.
Getting in and getting out (Score:2)
The real money is made on the fluctuation in value.
Long on the way up, short on the way down.
And just because the valuation level reaches $1 billion (or 1 unicorn) does not mean a company will survive long term. That is marketing using a decades old fairy tale.
At least stocks have value beyond crypto currencies.
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And valuations don't fluctuate on private companies, they only change when a private financing is made.
Valuations of private companies can fluctuate wildly. However, they fluctuate mainly across evaluators rather than time. Ask 100 evaluators for their estimate of the valuation, and you'll get 100 different answers.
Valuations for public companies, even when evaluated by a large stock market, are under no obligation to reflect true intrinsic value. Valuations for private companies have an even looser connection to true value.
One definition of valuation is the price a buyer would pay. But if there are no curre
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If only 20% fail, the rest only need to average 20% growth for investors to break even.
If 20% fail completely, the remaining 80% need to return 1.25× on average just to break even:
0.8 × R = 1 R = 1.25
That’s +25%, not +20%.
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oops, shows what happens when I do arithmetic on the fly.
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Define "tech" (Score:3)
It used to mean real tech, like chips, devices and serious software
Now it is applied to all sorts of silly social media, shopping, games and other mass market consumer stuff
We need a new word to describe hardcore tech
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Re: Define "tech" (Score:2)
Games involve some of the most challenging ... (Score:2)
It used to mean real tech, like chips, devices and serious software Now it is applied to all sorts of silly social media, shopping, games and other mass market consumer stuff We need a new word to describe hardcore tech
Games may be a "trivial" software application, if you consider entertainment "trivial". However gaming software development is some of the most difficult out there. Been there, done that. Software for real tech equipment, serious scientific software, embedded solutions, ... none of them were as challenging to develop as AAA games.
Re: Games involve some of the most challenging ... (Score:2)
I don't think it was always intentional,.but computer games are also a great channel for prototyping and UX R&D that pays for itself.
Unicorn Farts (Score:5, Funny)
"Valued" or "Worth" ? (Score:3)
These unicorns have been estimated to have a value of over $1B at an early stage in their life cycle when their income has been small - this valuation is based on speculation as to what might happen in the future. These companies will only be worth over $1B once they have a solid product that is selling well to many customers.
Grinding out articles (Score:4, Insightful)
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https://en.wikipedia.org/wiki/... [wikipedia.org]
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What's not to love? That's what makes
You're on
Slashdot Editors Unveil Revolutionary Strategy (Score:3, Funny)
Slashdot Announces New Clickbait Strategy: "If It Clicks, It Sells!"
Silicon Valley, CA — In a groundbreaking announcement that has left the tech community both amused and bewildered, Slashdot, the long-standing tech news aggregator, revealed its latest strategy to boost revenue: a commitment to using absolutely anything for clickbait, no matter how absurd or irrelevant.
During a press conference held in a room decorated with vintage tech memorabilia and a suspicious number of rubber chickens, Slashdot CEO Rob "The Clickmaster" McTechface unveiled the initiative, aptly named "If It Clicks, It Sells!" The plan aims to transform the site into a clickbait powerhouse, capitalizing on the internet's insatiable appetite for sensationalism.
"Why limit ourselves to actual news when we can exploit the bizarre and the ridiculous?" McTechface declared, his enthusiasm palpable. "From '10 Ways Your Cat Is Actually a Secret Agent' to 'Is Your Toaster Trying to Kill You? The Shocking Truth,' we’re ready to dive headfirst into the clickbait abyss!"
The new strategy will see Slashdot employing a team of "Clickbait Engineers," whose sole responsibility will be to brainstorm and create headlines that are guaranteed to draw in readers. "We’re talking about headlines so outrageous that they’ll make you question your own sanity," said lead Clickbait Engineer Jane "Headline Wizard" Smith. "Our goal is to make you click before you even know what you’re clicking on!"
Among the first wave of clickbait articles set to launch under the new initiative are gems like "Scientists Discover That 90% of All Tech Support Calls Are Just People Asking for Help with Their Wi-Fi Passwords" and "This One Weird Trick Will Make Your Smartphone Last Forever (Spoiler: It’s Not Charging It)."
Critics have raised concerns about the ethical implications of such a strategy. "This is a slippery slope," warned media analyst Dr. I.P. Freely. "If Slashdot starts publishing articles about how to train your goldfish to code, we might as well throw journalistic integrity out the window."
In response to these concerns, McTechface assured the public that the site would maintain a "code of ethics" when it comes to clickbait. "We promise to only use mildly misleading headlines," he said, adding, "We wouldn’t want to mislead our readers too much. After all, we still want them to come back for more!"
To further entice readers, Slashdot plans to introduce a new subscription model that offers users exclusive access to even more outrageous clickbait content. "For just $5 a month, you can unlock our premium section, featuring articles like 'The Shocking Connection Between Tech CEOs and Alien Abductions' and 'Why Your Smart Fridge Might Be Plotting Against You,'" McTechface announced, grinning widely.
Industry analysts are divided on the potential success of this clickbait strategy. Some believe it could lead to a surge in traffic and revenue, while others fear it could tarnish the site’s reputation as a credible source of tech news. "At this point, who cares about reputation?" McTechface quipped. "We’re in the business of clicks, not credibility!"
As the press conference wrapped up, attendees were left wondering if they had just witnessed the dawn of a new era in tech journalism or the beginning of a clickbait apocalypse. Either way, one thing is clear: Slashdot is ready to do whatever it takes to make a buck—even if it means turning the tech news landscape into a circus of absurdity.
In the words of McTechface, "If it clicks, it sells! And if it sells, we’re all in!"
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But it's still pretty funny.
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what's a suspicious number of rubber chickens exactly?
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what's a suspicious number of rubber chickens exactly?
More than none.
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Timeframe? (Score:2)
Everything ends, a few companies last over a century, but most fail or are acquired (which may mask a failure).
Will they fail in a year? In 5? In 10? In 100?
Without a timeframe it's a meaningless statement.
Doubtful (Score:2)
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Probably because they are big enough to survive while a merger or acquisition is negotiated. It's the quiet way to die.
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the 6 in 7 don't die simultaneously.
Some keep growing before dying, etc.
The unicorns don't start as such, but have already survived most of their contemporaries. Having survived that long, it appears that only another 20% die.
well (Score:2)
A billion ain't what it used to be (Score:2)
I mean, things are like two or three times more expensive than they were 25 years ago, so shouldn't we move the threshold for a unicorn to $3bil or so?
They will all fail (Score:2)
All these unicorns have software that can be recreated by a single coder with AI, in a weekend. The only value these have unicorn is in their existing customer base and brand. That's not worth billions. VCs are toast.