Will it Get Better Before it Gets Worse?

In New York I learned a valuable lesson: always see the other side of the trade. Considering the viewpoints of people with whom we don't agree provides perspective and challenges us to think deeply about our positions. It's also uncomfortable, and uncomfortable is often good.

There are signs abound that the San Francisco real estate market is cracking. Inventory is up, in both units for lease and sales. VCs are pulling back, challenging startups to cut costs and work towards profitability. Layoffs, hiring freezes and other reactions in the labor market are being felt from restaurants to rentals.

So why then did Venture Capital just have the best fundraising quarter since 2000? According to the Wall Street Journal, VC firms raised in around $13 billion, the biggest quarterly haul since the peak of the dotcom frenzy more than 15 years ago.

The skeptic in me sees this data point as corroborating my view that the peak is here. That endowments and pensions often play the role of greatest fool. But reading the other side of the trade is informative. 

If VCs are pitching value, that all these great and transformative companies are now on sale, what then? A lifeline for certain companies, another batch of monster funding rounds could forestall the inevitable. Indeed, it's not entirely unlikely that we'll see one last gasp, a blow-off top as startups fight out of the corner in a final, heroic but ultimately doomed attempt to retain what's already slipping away.