Investors will take the advice of SoftBank’s founder with a grain of salt. But there are good reasons he’s still worried about a “serious wound” from the tech sector.
It’s a brave investor who would take the advice of Masayoshi Son, the founder of Japanese tech investment giant SoftBank,
“We were in a kind of bubble on valuations,” Son said in Tokyo on Monday night, in a statement of the bleeding obvious. “If we had been more selective and invested better, we wouldn’t have received this heavy blow.”Son is preparing to slash costs and sell investments as he repairs the damage.
Again, investors will rightly take Son’s insights with a tonne of salt. But the idea that there could still be some big, ugly surprises in the tech sector, and particularly among private companies, is worth thinking about.reported this week that investors were selling their stakes in private equity and venture capital funds at a record rate this year.
Start-ups that need to raise capital for any reason – funding growth or giving employees and other investors a way to monetise their stakes – are likely to do so at lower valuations.
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