[Music] startup valuations and tech industry
startup valuations and tech industry
startup valuations and tech industry employment rates continue to grow the
employment rates continue to grow the
employment rates continue to grow the potential for another tech bubble looms
potential for another tech bubble looms
potential for another tech bubble looms in the future welcome to watchmojo.com
down 10 crucial facts you should know
down 10 crucial facts you should know about the potential tech bubble number
about the potential tech bubble number
about the potential tech bubble number 10 what is an economic bubble an
10 what is an economic bubble an
10 what is an economic bubble an economic bubble is a period at which
economic bubble is a period at which
economic bubble is a period at which point the values of assets are
point the values of assets are
point the values of assets are considerably greater than their
considerably greater than their
considerably greater than their intrinsic value and they are traded at
intrinsic value and they are traded at
intrinsic value and they are traded at these prices generally speaking such a
these prices generally speaking such a
these prices generally speaking such a period is confirmed when the market
period is confirmed when the market
period is confirmed when the market subsequently drops prices which leads to
subsequently drops prices which leads to
subsequently drops prices which leads to a correction and industry as well as a
a correction and industry as well as a
a correction and industry as well as a drop in consumer and investor confidence
drop in consumer and investor confidence
drop in consumer and investor confidence the first recorded economic or
the first recorded economic or
the first recorded economic or speculative bubble occurred during the
speculative bubble occurred during the
speculative bubble occurred during the Dutch tulip mania in the 1630s
Dutch tulip mania in the 1630s
Dutch tulip mania in the 1630s throughout this period the value of
throughout this period the value of
throughout this period the value of tulip bulbs rose and then fell sharply
tulip bulbs rose and then fell sharply
tulip bulbs rose and then fell sharply and at one point was 10 times the annual
and at one point was 10 times the annual
and at one point was 10 times the annual salary of a skilled craftsman the
salary of a skilled craftsman the
salary of a skilled craftsman the problem with economic bubbles is that
problem with economic bubbles is that
problem with economic bubbles is that they’re nearly impossible to predict and
they’re nearly impossible to predict and
they’re nearly impossible to predict and only after the dust has settled are
only after the dust has settled are
only after the dust has settled are important markers and indicators of an
important markers and indicators of an
important markers and indicators of an impending bubble discovered number 9
impending bubble discovered number 9
impending bubble discovered number 9 what was the dot-com bubble the dot-com
what was the dot-com bubble the dot-com
what was the dot-com bubble the dot-com bubble occurred primarily between 1997
bubble occurred primarily between 1997
bubble occurred primarily between 1997 and 2000 during which industry stock
and 2000 during which industry stock
and 2000 during which industry stock prices rose and fell dramatically and
prices rose and fell dramatically and
prices rose and fell dramatically and resulted in the collapse of the internet
resulted in the collapse of the internet
resulted in the collapse of the internet sector on the stock market the bubble
sector on the stock market the bubble
sector on the stock market the bubble was a result of the meteoric rise of
was a result of the meteoric rise of
was a result of the meteoric rise of dot-com stock prices as venture
dot-com stock prices as venture
dot-com stock prices as venture capitalists heavily invested in
capitalists heavily invested in
capitalists heavily invested in companies that had little to no profit
companies that had little to no profit
companies that had little to no profit with only the expectation of future
with only the expectation of future
with only the expectation of future revenue in five years the value of the
revenue in five years the value of the
revenue in five years the value of the Nasdaq Composite which many tech stocks
Nasdaq Composite which many tech stocks
Nasdaq Composite which many tech stocks call home rapidly grew from 1,000 points
call home rapidly grew from 1,000 points
call home rapidly grew from 1,000 points to over 5,000 by the year 2000 the
to over 5,000 by the year 2000 the
to over 5,000 by the year 2000 the bubble burst on March 11 2007 reaction
bubble burst on March 11 2007 reaction
bubble burst on March 11 2007 reaction by sinking the Nasdaq triggering a large
by sinking the Nasdaq triggering a large
by sinking the Nasdaq triggering a large volume of company bankruptcies a slew of
volume of company bankruptcies a slew of
volume of company bankruptcies a slew of high profile lawsuits and eventually a
high profile lawsuits and eventually a
high profile lawsuits and eventually a full US economic recession number 8 what
full US economic recession number 8 what
full US economic recession number 8 what was the aftermath the resulting stock
was the aftermath the resulting stock
was the aftermath the resulting stock market crash from 2000 to 2002 led to a
market crash from 2000 to 2002 led to a
market crash from 2000 to 2002 led to a drastic loss of over five trillion in
drastic loss of over five trillion in
drastic loss of over five trillion in the mark
the mark
the mark value of industry companies furthermore
value of industry companies furthermore
value of industry companies furthermore the value of the NASDAQ quickly sunk
the value of the NASDAQ quickly sunk
the value of the NASDAQ quickly sunk beginning in March 2000 and within a
beginning in March 2000 and within a
beginning in March 2000 and within a month nearly a trillion dollars worth of
month nearly a trillion dollars worth of
month nearly a trillion dollars worth of stock value had disappeared let me go
stock value had disappeared let me go
stock value had disappeared let me go back what is it I can’t wait I can’t
back what is it I can’t wait I can’t
back what is it I can’t wait I can’t wait I can’t wait what is it iguana
wait I can’t wait what is it iguana
wait I can’t wait what is it iguana large companies began to fold such as
large companies began to fold such as
large companies began to fold such as pets calm with others declaring
pets calm with others declaring
pets calm with others declaring bankruptcy amid allegations of illegal
bankruptcy amid allegations of illegal
bankruptcy amid allegations of illegal accounting practices leading to an
accounting practices leading to an
accounting practices leading to an exaggeration of yearly profits the
exaggeration of yearly profits the
exaggeration of yearly profits the events of September 11th in 2001 further
events of September 11th in 2001 further
events of September 11th in 2001 further intensified the stock market drop by the
intensified the stock market drop by the
intensified the stock market drop by the end of 2004 over 50% of the dot-com
end of 2004 over 50% of the dot-com
end of 2004 over 50% of the dot-com companies had gone bankrupt number 7
companies had gone bankrupt number 7
companies had gone bankrupt number 7 what changes were made as a result of
what changes were made as a result of
what changes were made as a result of the dot-com bubble numerous changes were
the dot-com bubble numerous changes were
the dot-com bubble numerous changes were instilled this included more stringent
instilled this included more stringent
instilled this included more stringent standards by which a company could
standards by which a company could
standards by which a company could launch an initial public offering as
launch an initial public offering as
launch an initial public offering as well as more restrictions on investment
well as more restrictions on investment
well as more restrictions on investment bankers of research analysts enacted on
bankers of research analysts enacted on
bankers of research analysts enacted on July 30th 2002 the sarbanes-oxley Act or
July 30th 2002 the sarbanes-oxley Act or
July 30th 2002 the sarbanes-oxley Act or Sox is a united states law that enhanced
Sox is a united states law that enhanced
Sox is a united states law that enhanced the responsibilities of a public
the responsibilities of a public
the responsibilities of a public corporations Board of Directors
corporations Board of Directors
corporations Board of Directors augmented criminal penalties for
augmented criminal penalties for
augmented criminal penalties for retaliation against whistleblowers and
retaliation against whistleblowers and
retaliation against whistleblowers and the failure to certify corporate
the failure to certify corporate
the failure to certify corporate financial records what’s more an
financial records what’s more an
financial records what’s more an agreement was reached on April 28 2003
agreement was reached on April 28 2003
agreement was reached on April 28 2003 titled the global settlement it revolved
titled the global settlement it revolved
titled the global settlement it revolved around the issue of conflict of interest
around the issue of conflict of interest
around the issue of conflict of interest within investment firms the agreement
within investment firms the agreement
within investment firms the agreement was settled between the SEC NASD NY SE
was settled between the SEC NASD NY SE
was settled between the SEC NASD NY SE and ten of the largest US financial
and ten of the largest US financial
and ten of the largest US financial institutions and required that they
institutions and required that they
institutions and required that they literally insulate and separate their
literally insulate and separate their
literally insulate and separate their banking and analysis departments this
banking and analysis departments this
banking and analysis departments this was done in order to prevent the abuse
was done in order to prevent the abuse
was done in order to prevent the abuse that had occurred from the pressure
that had occurred from the pressure
that had occurred from the pressure investment bankers placed on their
investment bankers placed on their
investment bankers placed on their analysts to provide falsified favorable
analysts to provide falsified favorable
analysts to provide falsified favorable portfolio results number six what is a
portfolio results number six what is a
portfolio results number six what is a start-up a start-up is the term given to
start-up a start-up is the term given to
start-up a start-up is the term given to a newly created company that is in a
a newly created company that is in a
a newly created company that is in a rapid process of development research
rapid process of development research
rapid process of development research innovation and scalability modern
innovation and scalability modern
innovation and scalability modern startups are typically characterized by
startups are typically characterized by
startups are typically characterized by their low bootstrap costs dependency on
their low bootstrap costs dependency on
their low bootstrap costs dependency on private equity and high rate for
private equity and high rate for
private equity and high rate for potential return on investment while
potential return on investment while
potential return on investment while having a relatively small rate of
having a relatively small rate of
having a relatively small rate of success examples of modern-day
success examples of modern-day
success examples of modern-day successful startups range from the
successful startups range from the
successful startups range from the popular and well
popular and well
popular and well such as uber and Pinterest to the
such as uber and Pinterest to the
such as uber and Pinterest to the obscure yet massively profitable
obscure yet massively profitable
obscure yet massively profitable Palantir technologies a software company
Palantir technologies a software company
Palantir technologies a software company that specializes in data analysis and
that specializes in data analysis and
that specializes in data analysis and has even had clients like the CIA and
has even had clients like the CIA and
has even had clients like the CIA and FBI this type of business model has bled
FBI this type of business model has bled
FBI this type of business model has bled into corporate culture instilling a
into corporate culture instilling a
into corporate culture instilling a casual attitude that promotes efficiency
casual attitude that promotes efficiency
casual attitude that promotes efficiency by removing environmental stressors in
by removing environmental stressors in
by removing environmental stressors in the office setting companies such as
the office setting companies such as
the office setting companies such as Google have deliberately cultivated a
Google have deliberately cultivated a
Google have deliberately cultivated a relaxed and enriched work environment in
relaxed and enriched work environment in
relaxed and enriched work environment in order to attract the best and brightest
order to attract the best and brightest
order to attract the best and brightest talent from startups there is no set
talent from startups there is no set
talent from startups there is no set date at which point a company ceases to
date at which point a company ceases to
date at which point a company ceases to be labeled a start-up but most of these
be labeled a start-up but most of these
be labeled a start-up but most of these businesses and their startup phase when
businesses and their startup phase when
businesses and their startup phase when they reach milestones such as an
they reach milestones such as an
they reach milestones such as an acquisition by a larger firm a large
acquisition by a larger firm a large
acquisition by a larger firm a large employee base considerable revenue or an
employee base considerable revenue or an
employee base considerable revenue or an initial public offering number five who
initial public offering number five who
initial public offering number five who invest in startups startups can find
invest in startups startups can find
invest in startups startups can find funding from multiple sources including
funding from multiple sources including
funding from multiple sources including venture capital firms angel investors
venture capital firms angel investors
venture capital firms angel investors seed funds and crowdfunding these
seed funds and crowdfunding these
seed funds and crowdfunding these sources of funding are important at
sources of funding are important at
sources of funding are important at different levels of the startup growth
different levels of the startup growth
different levels of the startup growth phase at the beginning it is typically
phase at the beginning it is typically
phase at the beginning it is typically angel investors seed funds or
angel investors seed funds or
angel investors seed funds or crowdfunding websites that provide the
crowdfunding websites that provide the
crowdfunding websites that provide the initial funding companies such as Y
initial funding companies such as Y
initial funding companies such as Y Combinator are known to fund hundreds of
Combinator are known to fund hundreds of
Combinator are known to fund hundreds of startups by providing seed money that
startups by providing seed money that
startups by providing seed money that amounts to about one hundred and twenty
amounts to about one hundred and twenty
amounts to about one hundred and twenty thousand dollars in total this is known
thousand dollars in total this is known
thousand dollars in total this is known as the seed round once a company has
as the seed round once a company has
as the seed round once a company has gained traction and is generating
gained traction and is generating
gained traction and is generating revenue it begins its series around a
revenue it begins its series around a
revenue it begins its series around a more aggressive route of funding whereby
more aggressive route of funding whereby
more aggressive route of funding whereby venture firms may provide significant
venture firms may provide significant
venture firms may provide significant funding in the range of two to ten
funding in the range of two to ten
funding in the range of two to ten million dollars in exchange for a
million dollars in exchange for a
million dollars in exchange for a portion of the company this leads to
portion of the company this leads to
portion of the company this leads to Series B C and D rounds of funding
Series B C and D rounds of funding
Series B C and D rounds of funding before the company eventually launches
before the company eventually launches
before the company eventually launches the initial public offering number four
the initial public offering number four
the initial public offering number four what is an IPO the acronym IPO stands
what is an IPO the acronym IPO stands
what is an IPO the acronym IPO stands for the term initial public offering a
for the term initial public offering a
for the term initial public offering a process by which a private company
process by which a private company
process by which a private company becomes public by issuing shares of
becomes public by issuing shares of
becomes public by issuing shares of stock in their company to institutional
stock in their company to institutional
stock in their company to institutional investors which in turn are sold to the
investors which in turn are sold to the
investors which in turn are sold to the general public for the first time the
general public for the first time the
general public for the first time the first recorded modern IPO occurred in
first recorded modern IPO occurred in
first recorded modern IPO occurred in March 1602 when the Dutch East India
March 1602 when the Dutch East India
March 1602 when the Dutch East India Company offered its shares to the public
Company offered its shares to the public
Company offered its shares to the public an IPO can be a huge asset to a company
an IPO can be a huge asset to a company
an IPO can be a huge asset to a company as it can generate a massive influx of
as it can generate a massive influx of
as it can generate a massive influx of revenue give easier access to capital
revenue give easier access to capital
revenue give easier access to capital and
and
and Cree’s exposure and brand by contrast an
Cree’s exposure and brand by contrast an
Cree’s exposure and brand by contrast an IPO can lead to an increase in marketing
IPO can lead to an increase in marketing
IPO can lead to an increase in marketing accounting and legal costs and an
accounting and legal costs and an
accounting and legal costs and an overall loss of control due to new
overall loss of control due to new
overall loss of control due to new shareholders it would also allow the
shareholders it would also allow the
shareholders it would also allow the public and competitors to gain access of
public and competitors to gain access of
public and competitors to gain access of company financials and policy the
company financials and policy the
company financials and policy the current IPO process in the United States
current IPO process in the United States
current IPO process in the United States is overseen by the United States
is overseen by the United States
is overseen by the United States Securities and Exchange Commission and
Securities and Exchange Commission and
Securities and Exchange Commission and in the United Kingdom it is regulated by
in the United Kingdom it is regulated by
in the United Kingdom it is regulated by the UK listing authority number three
the UK listing authority number three
the UK listing authority number three how our startups valued evaluation of a
how our startups valued evaluation of a
how our startups valued evaluation of a startups worth is extremely important as
startups worth is extremely important as
startups worth is extremely important as it will dictate the level of funding an
it will dictate the level of funding an
it will dictate the level of funding an angel investor or a venture capital firm
angel investor or a venture capital firm
angel investor or a venture capital firm is willing to invest in the company
is willing to invest in the company
is willing to invest in the company valuations are notoriously hard to
valuations are notoriously hard to
valuations are notoriously hard to calculate as most startups have little
calculate as most startups have little
calculate as most startups have little history revenue or earnings
history revenue or earnings
history revenue or earnings this leads prospective investors to
this leads prospective investors to
this leads prospective investors to calculate valuations based on similar
calculate valuations based on similar
calculate valuations based on similar industry valuations and the level of
industry valuations and the level of
industry valuations and the level of competition for start-up investment
competition for start-up investment
competition for start-up investment based on the economy in booming economic
based on the economy in booming economic
based on the economy in booming economic times there will be larger company
times there will be larger company
times there will be larger company valuations as competition to invest in
valuations as competition to invest in
valuations as competition to invest in the best startup is higher for example
the best startup is higher for example
the best startup is higher for example in 2013 there were only 38 tech startups
in 2013 there were only 38 tech startups
in 2013 there were only 38 tech startups valued at over 1 billion dollars also
valued at over 1 billion dollars also
valued at over 1 billion dollars also known as unicorns yet as of May 2015
known as unicorns yet as of May 2015
known as unicorns yet as of May 2015 there were over a hundred not to mention
there were over a hundred not to mention
there were over a hundred not to mention over a handful of deca corns companies
over a handful of deca corns companies
over a handful of deca corns companies that are valued at over 10 billion such
that are valued at over 10 billion such
that are valued at over 10 billion such as uber Dropbox
as uber Dropbox
as uber Dropbox Naomi and Airbnb number two our startups
Naomi and Airbnb number two our startups
Naomi and Airbnb number two our startups being overvalued as company valuations
being overvalued as company valuations
being overvalued as company valuations continue to grow at a staggering pace
continue to grow at a staggering pace
continue to grow at a staggering pace many in the industry fear that they’re
many in the industry fear that they’re
many in the industry fear that they’re being pushed by external factors such as
being pushed by external factors such as
being pushed by external factors such as low interest rates and investors fear of
low interest rates and investors fear of
low interest rates and investors fear of missing out and a need for higher
missing out and a need for higher
missing out and a need for higher returns as of mid May 2015
returns as of mid May 2015
returns as of mid May 2015 uber an American international
uber an American international
uber an American international transportation network company is
transportation network company is
transportation network company is pushing for another round of funding in
pushing for another round of funding in
pushing for another round of funding in the territory of two billion dollars
the territory of two billion dollars
the territory of two billion dollars expectations are that this round would
expectations are that this round would
expectations are that this round would push the company to a valuation of more
push the company to a valuation of more
push the company to a valuation of more than 50 billion which would make it the
than 50 billion which would make it the
than 50 billion which would make it the highest valued venture-backed startup in
highest valued venture-backed startup in
highest valued venture-backed startup in history that being said there are many
history that being said there are many
history that being said there are many industry investors and experts who
industry investors and experts who
industry investors and experts who believe that startups are not overvalued
believe that startups are not overvalued
believe that startups are not overvalued for example according to Sam almond
for example according to Sam almond
for example according to Sam almond president of Y Combinator giving a
president of Y Combinator giving a
president of Y Combinator giving a start-up and easier access to a large
start-up and easier access to a large
start-up and easier access to a large cash flow can kill a good company
cash flow can kill a good company
cash flow can kill a good company number one is there another tech bubble
number one is there another tech bubble
number one is there another tech bubble brewing the question of whether there is
brewing the question of whether there is
brewing the question of whether there is another tech bubble brewing is a touchy
another tech bubble brewing is a touchy
another tech bubble brewing is a touchy one as the 2,000 comm bubble still
one as the 2,000 comm bubble still
one as the 2,000 comm bubble still weighs heavily on investors minds thanks
weighs heavily on investors minds thanks
weighs heavily on investors minds thanks to the dot-com bubble there are stricter
to the dot-com bubble there are stricter
to the dot-com bubble there are stricter regulations governing IPOs and
regulations governing IPOs and
regulations governing IPOs and investments making it harder for Shapley
investments making it harder for Shapley
investments making it harder for Shapley constructed companies to go public
constructed companies to go public
constructed companies to go public however according to entrepreneur Mark
however according to entrepreneur Mark
however according to entrepreneur Mark Cuban an American investor and owner of
Cuban an American investor and owner of
Cuban an American investor and owner of the NBA’s Dallas Mavericks we are in a
the NBA’s Dallas Mavericks we are in a
the NBA’s Dallas Mavericks we are in a bubble and actually headed towards its
bubble and actually headed towards its
bubble and actually headed towards its imminent burst while stock markets may
imminent burst while stock markets may
imminent burst while stock markets may be affected
be affected
be affected unlike the 2000 calm bubble he argues
unlike the 2000 calm bubble he argues
unlike the 2000 calm bubble he argues that angel investments also will be
that angel investments also will be
that angel investments also will be which is an even bigger problem startup
which is an even bigger problem startup
which is an even bigger problem startup valuations and tech industry employment
valuations and tech industry employment
valuations and tech industry employment rates continue to grow yet whether our
rates continue to grow yet whether our
rates continue to grow yet whether our world is actually in another tech bubble
world is actually in another tech bubble
world is actually in another tech bubble remains to be seen
remains to be seen
remains to be seen did these facts surprise you to vote for
did these facts surprise you to vote for
did these facts surprise you to vote for which news story is covered next
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