Given the recent jittery movements in financial markets, you’d be excused for believing this quote concerns a 2022 prediction. In reality, Mary Meeker, the Internet Queen who built a successful career in Wall Street before moving to Venture Capital (she closed Bond Capital II at $2 billion last year), said it over 20 years ago.
Asked how long she thought the consequences of the 2000 Internet Bubble Burst would last, Meeker replied that it would probably take about two years.
Her rationale: new entrants will recede as they lick their wounds and interest rates fluctuate.
“There’s scar tissue in the market. There were too many venture capitalists who didn’t know how to be venture capitalists.”
Mary Meeker. Source: Business week online
It would take some time for the recently funded startups to go bust. Meeker explains that the cause of the dot.com bubble is that investors forgot it was hard to grow companies and took startups public too early.
But, Meeker insisted, the best opportunities were yet to come. Apple took off after the tech burst of 1984, Dell and Microsoft after the PC market correction of 1991.
I demonstrated in another post that this paradigm stayed valid after the 2008 crisis. There doesn’t seem to be any shortage of money for startups possessing attributes VCs like to see during economic crises, such as resiliency and counter-cyclicality.
