Tech Slowdown Seen in San Francisco's Commercial-Property Market

I’ve heard through the grapevine recently about some tech companies getting “sweet deals” on office leases & came across this article.

What’s the cause of the startup slowdown? Interests rate is still low and often times negative, I assume money look for yields may find their way to the VC firms. The companies mentioned in the article: Twitter and Zenefit are both executing very poorly. I wouldn’t used them as a bellwether for tech.

The article quoted here is also from March 16

It is a few months old. Perhaps the trend is reversing as the stock market benefits from unraised interest rates?

What I have heard is that many VCs are seeing the market as overheated and likely in late stages. They are being more picky regarding the companies they fund and focusing on late stage funding…hoping for a quick IPO payday. Smaller early stage unsuccessful companies (no names compared to Twitter and Zenefits) are starting to die off or be acquired. Acquisitions ultimately mean fewer jobs & less office space & housing demand.

There are a lot less IPOs. Quite a few of the recent ones are below IPO price. It’ll be interesting what happens when the bottle neck breaks, and we see more IPOs.

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High techies have been warning me about it for months. They are the ones working there, they hear their fellow techies being let go or not able to find another supporter for their visas. Many of them, I don’t know why, have a future life span of 6 years in the US, then they will go home.

I joke with them, I tell them to forget about the sweet heart left back home and marry an American to fix their problems.

I deal with many techies owning 401Ks and they are in a rush to rollover them into something better, or cash them out. Ka-chin!:laughing:

I hear a lot of slow down and layoff in tech. But in my day to day life, I am seeing the reverse. Our company (startup) is still trying to grow 50% (currently 200ppl company) and we are still having trouble recruiting as fast as we want. I still got at least 10 recruiting emails every week from LinkedIn from all sort of startups. We know the giants FANG (Facebook, Amazon, Netflix, Google), Apple, LinkedIn are still hiring like crazy. So yea, going IPO is slowing down due to uncertainty in the market, yea new funding might be a bit more tight to startups with vague monetization plan. But I don’t see any slow down in mid to growth startups or enterprises. My comments are only for software industry, btw.

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There are at least 20 software companies in each idea though. Most will fail and there will be a few winners. 75% of startups fail to produce an IPO or acquisition that’s more than was invested in them. That’s based on a long study of over 2,000 companies that had a funding round over $1M. Who knows how many fail before they raise that much in a round.


No doubt there. I think there is statistics from VC that they expect like 98% or so to be failed. They just need couple of successful ones that will cover ALL of their investments and more.

That’s always been true though since the dawn of venture capital.

Yes, but people act like the process is: move to SV, join startup, get rich. That’s rarely the case. Only the early people get rich. They have to wait the longest to payout and take the most risk. Now that companies are getting huge private valuations, the later employees aren’t going to get rich. I bet there are a bunch of Fitbit people waiting to vest options that are under water from pre-IPO valuation.

Most people are probably better off at Apple, Google, or Facebook.

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