Silicon Valley big Henderson warns startups: Don't burn money crazy

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Anderson, founder of the American venture capitalist and Netscape Company

Sina Science and technology news Beijing time, September 26 morning, the U.S. venture capitalist, Netscape founder Anderson (Marc Andreessen) has been denied that the current technology market bubble, but he Thursday on the status of the technology industry issued a warning.

The topic was first launched by Bill Gurley, Benchmark of the US venture capital, who warned of a massive burning of money by startups in an interview with the Wall Street Journal last week.

Anderson agrees, saying that while startups can easily raise money over the past 10 years with soaring valuations, the situation is "unsustainable".

He also said on Twitter: "When the market changes (the market will change sooner or later), we find out who is swimming naked: a lot of companies that burn money too fast will evaporate." ”

He added: "When the market changes, mergers and acquisitions will basically stop, no one will buy your money-burning machine." There will be no plan B, only waiting to die. So startups should be "worried".

In a subsequent Twitter message, Anderson also said that his venture capital firm, Andreessen Horowitz, had stopped investing in the growth phase, largely because hedge funds and other open market investors were pouring into private markets, driving up valuations for startups.

However, Anderson also deliberately stressed that these ideas only apply to the normal cyclical changes in capital markets, does not mean that we are in a bubble. However, most venture capitalists should be aware of the comments and may discuss the issues at the morning meeting next Monday.

In fact, Sequoia Capital had asked the startups they invested in 2008 to pay extra attention to spending conditions in response to a possible market recession. However, after the ensuing financial crisis, Silicon Valley again ushered in a capital feast. However, the reminders of venture capitalists such as Anderson and Gayle may have made startups realise again that there is no feast. (PEI)