Investors: It’s no time to be sitting on the sidelines
Investors tend to run for cover when markets slow down. And with the recent devaluation of many unicorns, the lack of IPOs, and the beginning of a slowdown in VC investments, it’s clear that venture investors are showing signs of fear.
I don’t see it that way.
Yes, the general climate of fear is growing. But that’s driving down valuations, which means that it’s cheaper to buy shares of tech startups. Combined with a general lack of understanding about how to value software-as-a-service (SaaS) companies, this means it is an opportune time for smart tech investors.
I’m not making a blanket statement about all tech stocks. It’s never a good idea to take a broad, unconsidered approach, either for or against all tech investments. That’s what got us into the extremely lofty valuations of the past few years in the first place, and it’s what’s leading many investors to pull back from tech now.
From a capital market perspective, when things go on sale, you buy. For whatever reason investors don’t think that way all the time. But right now, I believe things are going on sale—particularly SaaS companies.
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