Don't Panic -- It's Only a Tech Bust

The tech bust, which everyone thought was coming, is probably here. Venture capital funding is receding, companies are raising money at reduced valuations, and the rate of creation of “unicorn” companies (venture capital-funded private companies valued at over $1 billion) has slowed. Here is a chart, via Bloomberg View’s Jim Greiff:

No one knows how far the bust will go, how many unicorns will go out of business, or to what degree private-market funding will dry up. In the early stages of a bust, it’s very hard to tell how bad things will get. When housing prices began falling in 2007, for example, the initial reaction was only vague unease. In fact, the bust might prove to be only a temporary blip -- Fidelity, which made headlines in November by slashing its estimates for the value of many top startups, recently marked up the value of many.