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00:00SOMETIMES THAT WAITS UNTIL AFTER COMPANIES GO PUBLIC OR ARE ACQUIRED. SOMETIMES PEOPLE WANT TO BUY YOUR STOCK. SOMETIMES THIS HAPPENS BECAUSE A NEW INVESTOR WANTS TO INVEST MORE MONEY SO SOMETIMES THAT MEANS THEY BRIGHT -- BUY STOCK. THAT IS OK. EMILY: WE HAVE BEEN TALKING ABOUT FIDELITY WRITE-DOWNS OF SOME OF THESE MASSIVE PRIVATE COMPANIES LIKE DROPBOX. HOW IS ALL OF THIS STUFF IMPACTING YOUR PSYCHOLOGY AS AN INVESTOR? MARK: WE ASKED PEOPLE WHAT THEY EXPECTED TO HAPPEN IN 2016. 91% PREDICT VALUATIONS IN THE PRIVATE MARKETS ARE GOING TO GO DOWN. EMILY: THEY ARE ALREADY GOING DOWN. MARK: 30% SAID THEY ARE GOING TO GO DOWN SHARPLY. EVERYONE EXPECTS VALUATIONS TO COME DOWN IN 2016. EMILY: WHAT DOES THAT MEAN? MARK: LET'S START WITH WHY IT IS HAPPENING. 10 YEARS AGO THEY INVESTED ONE DOLLAR IN A STARTUP COMPANY AND NOW FOR EVERY DOLLAR, TWO AND A HALF TIMES THAT GOES INTO STARTUP COMPANIES. YOU KNOW HOW MUTUAL FUNDS AND HEDGE FUNDS AND CORPORATE INVESTORS AND EVERYONE IS INVESTING MONEY AND AS YOU HAVE THIS HUGE AMOUNT OF DOLLARS THAT HAVE GONE INTO THE SECTOR, VALUATIONS GO UP. THAT IS GOING TO CORRECT AND YOU WILL HAVE A COHORT OF COMPANIES THAT ARE GOING TO STRUGGLE TO RAISE MONEY. IT IS HARD TO RAISE. EMILY: WHO LAUGHS? MARK: 62% OF VC SAID PORTFOLIO COMPANIES ARE CUTTING COSTS. 62% SAID THAT. WHAT DOES THAT MEAN? IF YOU HAVE RAISED A LOT OF CAPITAL AND YOU HAVE A STRONG BALANCE SHEET, YOU WANT TO MAKE SURE THAT YOU SURVIVE AND THAT YOU SURVIVE LONG ENOUGH THAT YOU CAN GROW INTO AN INCREASED VALUATION. PART OF THAT IS REVENUE GROWTH AND NOT BURNING AS MUCH MONEY. EMILY: UBER SAW AN UNPRECEDENTED PRIVATE MARKET. ARE THEY ALSO DO FOR A WRITE-DOWN? MARK: IT IS POSSIBLE. IT'S A PRIVATE COMPANY. WE TALKED ABOUT THE SUCCESS OF GOOGLE, FACEBOOK, AND THOSE ARE GENERATIONAL COMPANIES. THE GENERATIONAL COMPANY OF THE LAST SIX YEARS IS UBER. WILL THAT GROWTH CONTINUE? WILL THEY HAVE REGULATORY PROBLEMS? SO FAR ALL SIGNS AND SAY NO. IT WILL BE CONTINUED GROWTH. EMILY: WOULD YOU SAY THE SAME ABOUT AIRBNB? MARK: AIRBNB IS A GREAT COMPANY. THEY CONTINUE TO GROW. THERE ARE PARALLELS WITH HOMEAWAY AND AIRBNB AND I THINK THERE WILL BE SOME QUESTIONS ABOUT THE LONG-TERM LIMITS OF THEIR GROWTH. IT IS A GREAT COMPANY. I DON'T KNOW IF IT IS VALUED PROPERLY. EMILY: MARK, THANK YOU. WE COULD TALK ABOUT THIS FOR HOURS. AN APP TO HAVE BEEN BANNED IS

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Is Startup Funding Slowing Down?

Mark Suster, Upfront Ventures managing partner, comments on Andreessen Horowitz selling Lyft shares and discusses the state of the venture capital market with Bloomberg's Emily Chang on "Bloomberg West." (Bloomberg LP, the parent company of Bloomberg Television, is an investor in Andreessen Horowitz.) (Source: Bloomberg)

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