But if you think about it long term, the Fed’s announcement is a prediction that economic growth
is going to be a problem for a while.
And that’s exactly the worry in Silicon valley — where some companies are taking a fresh look
at the economy and postponing their plans to go public.
Marketplace’s Steve Henn reports.
Steve Henn: In late June, everything was looking up for Silicon Valley investors. LinkedIn had a huge IPO. Pandora was going public. The appetite for successful tech start-ups was intense.
Peter Cohan runs his own venture capital firm.
Peter Cohan: I was pretty excited about what I thought was going to be the beginning of an IPO wave that would culminate in a $100 billion IPO for Facebook.
Then — well you know what happened then. Cohan says even now in the midst of all this market chaos, VCs should still be out there looking for great new companies, but:
Cohan: You need to have an IPO market where there are people out there willing to take the risk and buy shares of an IPO.
The start-up economy only works when early investors like Cohan are confident if they back great ideas — and it all pans out — they’ll reap a reward. They need exits — ways to sell to shares and get their money back. And when the markets are nuts, those exits are hard to come by.
In Silicon Valley, I’m Steve Henn for Marketplace.