[hn_throwaway_99]

The article touches on this, but I don't think it really addresses the root cause of the difference between 2000 and now. IMO the main difference is really just timing. Companies are staying private much longer than they did in the .com bubble. Back then, the IPOs still occurred during the "only thing that matters is eyeballs" phase, and when markets eventually expected profitability, the emperor was shown to be pantsless.

Now, though, companies that are going public are already large and have gobbled up a lot of their market due to VC funding. What's happening is that they are at the point where that profitability signal has to be in view - you can no longer say "it will be just around the corner". This flamed out most spectacularly with WeWork, but it's a bit of just desserts that private investors wanted to gobble up all the big early gains, only to find that the additional time just gives public investors more reason to be skeptical.

[jacquesm]

Punting a risky investment is a fine line between the dream still being alive and the bad news starting to roll in. For some investors - and sadly, even for some founders - this is during the earlier stages, which is why it is a huge red flag if founders or early investors insist on cashing out during later rounds.