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Is this 1999 or 2015? This wary optimist's review of a NYC investment conference.

August 10, 2015

Last week I attended an investment conference in Manhattan, and I was blown away.  Let me tell you why.  But first, for those of you that don't know what an investment conference is, I'll describe it.  Then, I will tell you all the reasons why I think this is both the best and the worst time to be raising money or going public.

 

 

 

So let's set the stage.  An investment conference is usually sponsored by an investment bank (an organization of experts that helps companies buy or sell companies and raise money from either private investments or public offerings) or another financial institution.  Invitees are both companies and investors, and this particular event I attended was set up like this:

  • Pre-event, I uploaded information about a particular company I'm involved with to the investment bank's portal.  This included the deck I was presenting, and my contact information.

  • As I arrived at the event's hotel, I was greeted with a schedule - the time slot for my presentation, and a list of people that signed-up to meet with me every other available moment. 

  • At the cocktail hour/dinner, I chatted with lots of other attendees from cool companies - all of which had either raised lots of money or were raising lots of money in the future.  I'm talking about $20M to $200M funding rounds.  

  • During my presentation, the room was full, people asked lots of questions, and several followed-up with me afterwards.

Great, right?  Leave it to an optimist to take the contrarian view.

 

The feeling universally was exuberant.  I came away with the impression that "there's lots of money available to help grow companies" and "there are a lot of great companies raising money."  The last time I felt like this was 1999, but that doesn't necessarily mean that history is about to repeat itself.  To help me make the decision, I made a list of the reasons why I think this is 1999 all over again (and, thus, due for a correction) and why it isn't (and why we probably have a lot of room to grow.)  Here's my list.

 

Like 1999/pending doom:

  • Lots of investment money available

  • Investment banks are spending half a million bucks on events like that

  • Company valuations are high

  • Many successful companies have higher losses than sales

  • Profitable companies are viewed with a skeptical eye

  • Heard more than once "something must be wrong, you should be losing more money"

Not like 1999/keep investing:

  • Really bad companies are not getting funded

  • My older relatives aren't asking me for stock advice

  • The dot-com boom/bust was measured by IPO volume and dollars.  The trend looks more "responsible" this time: 

 

So where do I land?  Most of us in a decision-making role with growth companies or investment firms have lived through, and remember all too well, the mistakes of the last boom cycle, and the graph above seems to prove that things are more measured this time.  If we see 2015 turn into a huge IPO year, however, beware ...

 

 

 

 

 

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