When Tailwinds Vanish

Companies with poor unit economics found themselves propelled by aggressive venture dollars (which themselves were propelled by a low-interest-rate environment). Those companies then turned those dollars into aggressive customer acquisition. Until recently, the market rewarded growth at all costs.

Startups are increasingly building product features that depend more on a balance sheet of capital to differentiate themselves versus customer value that is unique and defensible. This creates feature wars that quickly become balance sheet wars when other startups or incumbents decide to copy these features. Free stock trading, hi-rate savings acco... See more

There’s a broad spectrum of VCs and founders, the latter of whom possess differing levels of capability to maintain high growth and continually raise equity dollars at inflated valuations. For example, there are many companies who raise an angel/seed round, then a Series A, spend most of it on customer acquisition which flows right into FB and Goog... See more

Finally, capital is becoming a commodity. The current discussions between economists about the “global savings glut” reveal that there is too much capital to invest and too few opportunities to secure sizeable returns[173]. This may come as a surprise for entrepreneurs who rack their brains in vain trying to pitch investors who refuse to deploy cap

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