For many a tech pro, the dream (at least in broad strokes) is fairly simple: build and launch a startup, lead it to blistering growth, take it public, and profit enormously.
That dream helped drive growth in tech hubs across the nation, from California’s Silicon Valley to New York’s Silicon Alley. It led to a thousand investor pitches along the lines of, “It’s like Uber, only for [X]!” It employed thousands of recent computer-science graduates, who burned long hours at a desk in order to invent the Next Big Thing.
But is the dream waning?
No startups went public in the first quarter of 2016, suggests data from Dealogic (hat tip to Quartz for the link). Contrast that with the second quarter of 2014, when 24 tech firms launched an Initial Public Offering (IPO) or even the whole of 2015, which saw several companies hit the market.
Combine that lack of IPOs with data suggesting that venture investing dipped at the end of last year, and you can understand why some in the tech community are feeling a little nervous about the year ahead.
But it’s not doomsday for the startup market quite yet. Even if funding for new startups has begun to dry up, many of the so-called “unicorns” are still going strong. Uber and Airbnb are just two of the tech companies that have surpassed a billion-dollar valuation, and the pressure is rising for many of those to go public at some point in the near future. Startups with a proven record of revenue and/or customer acquisition, such as Slack, still receive ample funding.
And even if they’re not going public, many startups have recently found themselves the target of mergers and acquisitions, suggesting a continuing willingness to spend on innovation.
Rather, the emphasis within the startup community seems to be shifting. Gone are the days of unimpeded cash burn and easy funding; if you’re launching a startup, now it’s all about managing finances and proving that your business model is viable. Those companies that can demonstrate an ability to drive revenue will become part of the next, inevitable wave of IPOs.