The implosion of office space company WeWork this week is being digested as a le...
SAN FRANCISCO - The implosion of office space company WeWork this week is being digested as a lesson for Silicon Valley startups - in what not to do.
The consensus among venture capital investors at the TechCrunch Disrupt conference and elsewhere was that unlimited power and money were not good for building companies. Some of the problems were blamed on Japan’s SoftBank Group Corp , a backer of WeWork that has become one of the most powerful tech investors globally. SoftBank declined to comment on the criticism.
While interest rates remain low, don’t expect the flow of money to stop, said David Golden, managing partner at Revolution Ventures. He noted that big checks from investors could inflate values, making it more difficult to raise funds later - another issue highlighted by WeWork’s recent valuation struggles.
And at the conference, the general mood among the startups was upbeat. Garry Drummond, the CEO of 802 Secure, who was showing off his cyber security hardware on the floor, said he was raising up to $8 million in a series A round and that the WeWork debacle was not having any impact.But the wealth of funding has a third problem, also seen in WeWork, of undermining spending discipline.
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