YC founder warns Silicon Valley bad times will be hard to raise money for start-up companies

Facebook's performance after the IPO was unsatisfactory, and founder Paul Greheum of Silicon Valley's renowned incubator for innovation, Combinator, warned startups that the "bad times" in Silicon Valley might be ahead. In this email, Paul Greheum worries that the poor performance of Facebook's IPO could hurt the capital markets of early startups.　　This could mean that the first funds raised by new startups will be much less than they were before, or even zero. As a result, he suggests that companies that have not yet been financed should lower their expectations of financing, and that companies that have been financed may be forced to refinance at lower valuations.　　So the best solution is that you don't need the money, the less money you need, the more investors you'll be attracted to, and the less you'll get when the market is depressed. After the letter, BusinessInsider writer Nicolas Carlsen, the US tech blogger, quickly responded by saying that he disagreed with Paul Greheum's view. ' Financing is not an easy task at any given moment, ' he wrote in his blog.　　In the case of Facebook's IPO, despite its stock performance, he actually brought more money to Silicon Valley. In any case, Facebook is a company that has been successfully nurtured by Silicon Valley's superior financing system, and its IPO has brought a huge return for investors. It brought 16 billion of dollars to Silicon Valley, with 10 billion of dollars flowing to Facebook's employees and investors, and some of them turned into angel investors. The VC and the Angels will use the money to invest in some startups on Facebook's social map.　　This is also the rule of Silicon Valley, that is, investment-cash-withdrawal-reinvestment. The famous venture capitalists, too, have made some objections to Paul Greheum's Silicon Valley winter talk. He evaluates the business from the perspective of corporate valuations, with Facebook's corporate value, which is about $43 billion trillion, after subtracting cash from market capitalisation. This figure is about 10 times times its annual income, 25 times times its pre-tax operating profit, which is a great multiplier, and any company with these multipliers is worth investing in.　　However, in the capital market, some speculators do have irrational expectations of the IPO, so the market premium should be controlled in a reasonable range when the company's IPO is valued later. In 2000, Silicon Valley experienced a "nuclear winter", after the unprecedented prosperity of the internet, the bubble burst suddenly, all kinds of internet companies have gone bankrupt, office space deserted, venture capital from the hot influx into a handful. Then, in the 2008 financial crisis, it was also predicted that the slumping economy would put Silicon Valley's innovation companies in trouble, and even bring some of these companies to ruin.　　But the storm, which originated on Wall Street, has not stopped investors from investing, but has become cautious. When, companies in the early stages of Facebook and Twitter, though not yet profitable and with unknown business models, are still investing handsomely.　　So it is too early to judge that Silicon Valley will enter winter just on the basis of the failure of Facebook's IPO, after all, investors in the open market are tougher than VCs in the private equity market. Up to now, the growth of the internet is still strong, mobile device usage is growing rapidly, and still in the early stage, this is a good time for mobile application development start-up companies.　　A recent 2012 Internet Trends report by Meeker, the "Internet Queen", confirms these views. It can be said that the failure of the Facebook IPO has brought more rational thinking to Silicon Valley, with a large number of users, but limited revenues have struggled to prop up overvalued valuations, and their share prices are grim in the short term and are detrimental to the share price and valuations of other social-class companies. Twitter, with the same characteristics, has cut its share price in the private equity market by 15%. The valuation of Tumblr, which also relies on advertising revenue, has been downgraded.　　The private photo sharing application path, which has just completed the more than 30 million dollar B-round financing, has shifted the center of Business Development to "mobile-oriented socializing". Pinterest, a visual social networking site, has just raised more than $100 million trillion in money, but has also begun to re-examine its long-term development model and strive to make breakthroughs in mobile terminal platforms and business models.　　The business model of the professional social networking site LinkedIn advertising plus paid services is a good example, with stock prices now performing well, to a recent $96 trillion per share after raising $353 million trillion in IPO pricing of $45 a share last May. For nearly 5 years, the bubbles of innovative companies that have hit the social concept are a bit too big to cool down properly, a virtuous cycle for the entire ecosystem of Silicon Valley.