Exactly, to me from what I read in the media, it almost feels like VCs are rooting for a haircut to gain more bargaining power with companies. It has become expensive to get a piece of the pie and they want it easier. Not that I don't agree that everything is inflated, just that the only ones who I read talking about the downturn are he VCs and not the founders. (Also saying this as an outsider with limited exposure)
Anecdotally, there have been 2-4 partial washouts in the last 12 years of “bad” companies. However each time this came up, new money came in and saved the day. Bubbles have been called since 2013, in 2016 Uber, Lyft, and Wework all started looking shaky. The big crypto rumpus each resulted in a crash.
Now, the problem is that if you took the pessimist view at any of these times - you’d have missed the big “wins”. But now we have 100 Billion dollar companies which may not be viable businesses. Few to none of the unicorns ever went down.
Thing is, if you got in early on Uber and Lyft you still did well. Only SoftBank really got screwed on that one. Same goes for all the pandemic companies crashing now like Zoom. They IPO'd at $62, meaning if you invested pre-IPO you got over 10x returns at the peak.
You have to remember that VCs are really middlemen between investors and startups. The supply of funding is very much driven by investor psychology as well as various exogenous factors and startup valuations are driven by supply and demand rather than by what VC fund managers consider a good valuation to attain a reasonable return on investment.
I always think of 90% of the companies in SV absurd. Makes it really hard to work in the tech industry, I could never be a VC. I just dont know if this another bust/boom cycle or it'll be really dead now.
VC land always seems to contain so much absurdity that I don’t know why it suddenly matters, or when it will.