The BABC Northern California hosted its 8
^th Annual “Funding, Exits and IPOs” event at the Quadrus Conference Center on February 27^th 2019. The panel consisting of Bill Reichert – Managing Director, Garage Technology Ventures, Jonathan Tower – Managing Partner, Catapult, Mitchell Kertzman – Managing Director, Hummer Winblad Venture Partners and moderated by the West Coast Editor of the Financial Times, Richard Waters gave their predictions and insights to the roomful of guests in attendance.

Having warmed up the room with what should be on our reading lists, in reference to the announcement that Silicon Valley billionaire and Venture Capitalist Michael Moritz is the new sponsor of the Booker Prize, Richard Waters initiated the panel discussion. Waters pointed to a potential decline in IPOs in 2019 in comparison to last year, drawing attention to the big name in the spotlight; Uber. The panel voiced the disruptive nature of Uber, with similar comparisons made to Lyft and Airbnb, explaining how these industries are going to have a large long-term impact on sectors such as infrastructure and transportation. Bill Reichert followed up, describing his experience at this same event a few years back, as he predicted that the net worth of Uber would be a slow-burner, reaching $20 billion before reaching $80 billion. Mitchell Kertzman, another familiar face at this event, explained his love for Uber as a customer and when asked what price Uber will go for during its IPO, he compared the company with world-renowned organization Amazon, Stating it to be the most disruptive company in the world to date. Waters relayed information that Uber is predicted to go out at $120 billion and pushed each panelist to give their own figure. Towers believing there isn’t enough demand or interest, proposing $100b would be more realistic, Kertzman and Reichert giving less optimistic figures of $85b closing at $98b; and $65b respectively. Reichert recalling how Snapchat was in a similar situation where all assumed an overvaluation, and it was.

Furthermore, Waters brought about the query as to whether Uber should be public or private, highlighting that there is a large amount of cash flooding into the private sector, begging the question, does the panel see the pendulum swinging to the public sector? Reichert highlighted that Q1 has been somewhat disappointing; growth is slowing, there has been some pull back; which was hinted in December, as well as a moderate increase in IPOs at the start of this year. He also believed there to be a waning enthusiasm for start-up companies which should be addressed. Kertzman shared similar views and believes that he sees caution in the upcoming venture capital world, drawing on current conditions and assumptions.

Moving away from Uber, Waters then asked the panel for their opinion on Vision Fund investments and how these influences businesses jumping to international expansion. There was an overwhelming consensus that there is too much money being thrown at companies, with Kertzman pointing out that too much cash is often bad for companies as there is a lack of priority setting and decision making. The panel expressed some concern that one can argue it has become unsustainable and that too many VCs are writing checks to start ups. Reichert adding that there will need to be a ‘Darwinian crash’ as below the unicorns we are seeing numerous companies around the world being funded to “do the same thing”. Until this changes, Tower highlighted that we won’t be getting the next Uber and that the saving grace will be the next generation of operators behind the wheel at VCs.

The panel were then questioned as to whether they felt there was a crisis in innovation given the varying data on early stage funding down and a collapse in startups, an opinion not reflected by AngelList. There was a consensus that there has been exuberant growth within the startup industry and a flood of companies but that as many as80 % of these aren’t reaching ‘A’ stage as identified by Reichert. Tower put this down to how much cheaper it is to start a company today and doesn’t see this as a crisis, a viewpoint shared by the panel. Reichert identified that there has been a shift in building, developing and innovating within the technology realm that is permeating the world. Tower adding it’s an exciting time for investors as ideas on whiteboards from 10 years ago are now coming true.

The panel then fielded several questions from the audience regarding a number of topics, including their thoughts on the trend of co-working spaces; specifically WeWork, the roles that blockchain and cryptocurrency will play in various businesses, Brexit and its impact on London as an entry point, AI within the healthcare industry and representation of woman and inclusiveness within industry.

We would like to thank all our panelists and attendees, as well as our Platinum Sponsors:
CCW Business Solutions, our Gold sponsors: Carr McCellan and Invest Northern Ireland and our Wine Sponsors Penfolds Wines for making this a wonderful event.

You can check out some of the photos from the event
here