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Silicon Valley Had Its Heyday. Can Tech Ecosystems Now Grow Inland?

I’ve heard some concern, particularly when the Supreme Court decision [overturning Roe vs. Wade] was made. But I have not heard of any specific people who were going to move and decided not to, or had moved and decided to leave.

You lived through a tech bust. Are there similarities to what’s happening now?

In the first decade of AOL, nobody knew or cared about the internet, nor cared about AOL. In the second decade, suddenly everybody wanted to get online, and AOL ended up being the on-ramp. And when that was happening, you saw our stock price soar. Others said, “Wow, this internet thing is really interesting.”

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And suddenly there were hundreds of other dot-com companies, many of which were concept stocks that went public quite early. And then in 2000, obviously, it turned. Today, it’s fair to say that we’ve seen a 13-year bull market, with valuations holding for most companies, especially at historic levels for fast-growing tech firms. Recently, policy changes around things like interest rates have resulted in some of the air coming out of that balloon.

What’s different is that most of the companies that have gone public in the last five years are more fully developed. And so what’s happening now is a reset in their valuation. But the vast majority of the companies will still be around years from now, as opposed to what we saw in 2000.

How could rising rates mess with tech investing? What kind of companies do you think are most vulnerable right now to missing out on investment at a 3 percent or 4 percent benchmark rate?

What we’ve seen so far is more of a reset in the later-stage growth rounds, including by some of the very active crossover funds — Tiger and others — that are pulling back from investing in public companies. In the earlier stages, when you’re investing, call it a million dollars, and the valuation might be $10 million, there’s going to be less of a reset than when companies are worth hundreds of millions or even billions.

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