Tags: Andreessen | Silicon Valley | burn rate | venture capitsl

Marc Andreessen Warns of Silicon Valley Startups' Cash Burn Rate

Friday, 26 Sep 2014 07:18 AM

Marc Andreessen said Silicon Valley startups are burning through cash at an alarmingly rapid rate and may be putting themselves at risk of failing when the market shifts.

“When the market turns, and it will turn, we will find out who has been swimming without trunks on: many high burn rate co’s will VAPORIZE,” Andreessen, co-founder of venture capital firm Andreessen Horowitz, said in a Twitter post Thursday.

Andreessen joins a growing chorus of investors warning of a looming bubble in Silicon Valley, where venture capitalists are competing to find and fund startups. In the first half of the year, 14 U.S. technology companies were valued at $1 billion or more, more than double the total for 2013, according to researcher CB Insights.

Andreessen said startups can get caught up in a false sense of security when they start to hire staff and move into better offices.

“Lots of people, big shiny office, high expense base = Fake ‘we’ve made it!’ feeling. Removes pressure to deliver real results,” Andreessen tweeted. “More people multiplies communication overhead exponentially, slows everything down. Company bogs down, becomes bad place to work.”

Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.

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Marc Andreessen said Silicon Valley startups are burning through cash at an alarmingly rapid rate and may be putting themselves at risk of failing when the market shifts.
Andreessen, Silicon Valley, burn rate, venture capitsl
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2014-18-26
Friday, 26 Sep 2014 07:18 AM
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