1 year ago
85 Sequoia Capital Global Managing Partner Doug Leone speaks onstage during Day 2 of TechCrunch Disrupt SF 2018 astatine Moscone Center connected September 6, 2018 successful San Francisco, California.
Steve Jennings | Getty Images
HELSINKI, Finland — American task capitalist Doug Leone doesn't deliberation the tech wreck is going distant anytime soon.
The Sequoia Capital spouse gave a gloomy outlook for the planetary economy, informing that today's downturn was worse than recessions successful 2000 and 2008.
"The concern contiguous I deliberation is much hard and much challenging than either '08, which was truly a protected fiscal services crisis, oregon 2000, which was a protected exertion crisis," Leone said, speaking onstage astatine the Slush startup league successful Helsinki.
"Here, we person a planetary crisis. We person involvement rates astir the satellite increasing, consumers globally are starting to tally retired of money, we person an vigor crisis, and past we person each the issues of geopolitical challenges."
Tech leaders and investors person been forced to reckon with higher involvement rates and deteriorating macroeconomic conditions.
With cardinal banks raising rates and reversing pandemic-era monetary easing, high-growth tech stocks person been connected the decline.
The Nasdaq Composite is down astir 30% year-to-date, facing a sharper diminution than that of the Dow Jones Industrial Average oregon S&P 500.
That's had a knock-on effect connected privately-held companies, with the likes of Stripe and Klarna seeing their valuations drop.
As a result, startup founders are warning their peers that it's clip to rein successful costs and absorption connected fundamentals.
'Best lessons you're ever going to learn'
"Think of what happened successful the past 2 oregon 3 years: immoderate you did was rewarded by immoderate capitalist due to the fact that of the plethora of capital," Leone said.
"You were rewarded nary substance what — you made a s--t decision, a crap decision, you got money; you made a bully decision, you got wealth — which is simply a lousy mode for you to larn your craft. All that is gone."
"What you're going to larn present is the champion lessons you're ever going to learn, adjacent successful our business," helium added.
Leone said helium doesn't expect tech institution valuations to retrieve until astatine slightest 2024.
"My forecast is that we're not going to get distant with this precise quickly," Leone said. "If you crook backmost successful the 70s, determination was a malaise of 16 years. Even if you spell backmost to 2000, a fig of nationalist companies didn't retrieve for 10 years."
He added, "I deliberation we person to beryllium acceptable for a prolonged clip wherever we're going to find … consumers moving retired of money, request decreasing, tech companies' budgets being cut."
In the backstage markets, seed-stage companies volition beryllium little affected than later-stage firms, which are much delicate to movements successful the nationalist markets, Leone said.
