The Challenging Reality of Stagnant Valuations: Is the Tech Industry Stuck?

Name: The Challenging Reality of Stagnant Valuations: Is the Tech Industry Stuck?
Uploaded: 2024-02-01T20:28:55+00:00
Duration: 51 s
Channel: Jason M. Lemkin
Description: In this monologue, venture capitalist Jason M. Lemkin expresses personal discouragement and concern about the current public market environment where…

1 Feb 2024 · 1 min

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In this monologue, venture capitalist Jason M. Lemkin expresses personal discouragement and concern about the current public market environment where valuation multiples have settled around 6x. He notes that the tech industry has not truly operated in a 6x world since the 2017‑2018 period, referencing recent valuations of companies like AppFolio, Cloudflare, and MongoDB as rare examples that approach that level. Lemkin argues that if the market remains stuck at these low multiples, it will make fundraising harder and place significant stress on the startup ecosystem, though he remains excited about the potential for rapid growth in the fastest‑growing companies. He hints that the low‑multiple regime might be justified, but worries about its long‑term sustainability.

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my, my— I'm discouraged for the first time in my career at public multiples, and I am worried that, that if we stay in a 6x world, that we haven't really learned to live in a world where companies are worth 6x. They get funding harder, but we haven't lived in a 6x world for real since 2017, '28. Like, if you look at AppFolio, which I just wrote up today, if you look at Cloudflare, if you look at Mongo, um, it's almost the best. It's not the best of times, but it's darn close, right? And that's a long time ago, right? So we don't— we, we, we're not going right now. We actually haven't gone back to 1819. We've gone back further. And I'm, I'm, I'm totally— I, I'm excited about how the fastest can grow, but this multiple thing, you know, if it, if it, if we stay here forever, it just, it puts a lot of stress on the system. Um, and, um, maybe it's deserved.