After WeWork exploded there was — at least supposedly — a change in sentiment among investors and founders alike. Gone were the days of easy nine-figure rounds, expensive growth, negative unit economics and the rest of the excess that Startupland has enjoyed over the past half-decade.
Inside this purported sentiment shift, I presumed, was a decrease in optimism; surely venture capitalists and entrepreneurs would change their behavior inside this new paradigm?
But by some measures, they haven’t. I expected that startups would achieve more conservative proximate valuations in the post-WeWork world, as their leaders would aim to raise a bit less, and a bit more conservatively, and investors would be less starry-eyed in the prices they were willing to pay for startup equity.
That was all wrong, it turns out. A recent report from Fenwick and West, a legal firm that works with technology companies, paints a picture that is the complete opposite of what we might have anticipated.
Perhaps we shouldn’t be surprised; our recent reporting hardly describes a market in slowdown. Boston is having a good start to the year, for example. SaaS is also looking healthy from a venture capital perspective. Cloud stocks are at all-time highs and One Medical is still defying gravity as a public stock. Whatever lesson WeWork was supposed to teach, it doesn’t appear to have made much impact.
Let’s explore the Fenwick data and then ask if we can spot anywhere where the markets are behaving like the chastened children that we were told had taken over.
Up and to the right