Benchmark Capital’s Bill Gurley may be Silicon Valley’s best-known tech bubble doomsayer, but he took a positive view of the early stage investments in an onstage interview at the Wall Street Journal Live conference, Tuesday.
“Earliest stage is probably the most insulated from this,” he told the audience of his belief we are in an impending bubble pop.
This is most interesting because Gurley has not been upbeat about nearly everything in tech financing lately – but most especially unicorns, many of whom he believes are waiting too long to go public.
“The press and the community have given a free pass to all these unicorns,” he said. “Startups staying private too long are like that old guy in college who’s stayed around seven or 8 years. It’s like ‘What’s he doing’?” He also said the advice to stay private as long as possible was the “worst advice ever given in Silicon Valley.”
His advice to those in the early stage startups centered around staying low during this frothy economic period. “Just don’t rush yourself up to 50 people or something…focus on your product, your customer, on being nimble and you’ll probably ride through all of this,” Gurley said.
However, Gurley also dodged questions about the giant co-working startup WeWork, of whom Benchmark is an investor. The startup, if you can call a decacorn that, has added more than $1 billion to its coffers – its $355 million Series D round came from several late-stage heavy-weights like T. Rowe Price, Goldman Sachs, and Wellington Managment.
When asked if WeWork was overvalued, “I have no idea,” Gurley told Journal reporter Rolfe Winkler. Then added, “Have you been to one of them?”
Gurley went back to his usual economic forecasting for most of the discussion, adding, “Silicon Valley has entered a period that is speculative and unsustainable,” and “I personally wish the market would bring them all down so we can get to more realistic valuations.”
Gurley does not hold back his frank opinion – Companies shouldn’t wait to IPO, too many overvalued, liquid is the goal, etc. And the Benchmark general partner mostly stuck to his typical inflated valuations and bubble warning drumbeat during the interview, but also added that this was a good time for those of us using these private startup services.
“The VC community’s been subsidizing the biggest consumer surplus in history. Consumers should buy everything they can!” he said.