The summer of 2015 was a hot one. Not just in terms of temperature (although it was that, too), but also in regard to the climate of tech funding. Throughout the summer, VC experts and tech market mavens got all lathered up about the unprecedented amount of private dollars flowing into young startups.
An August article from the San Jose Mercury News perfectly channels the excitement. “It’s a fine time to be a tech entrepreneur,” the news source gushed. “Investors are funding companies at record pace, writing checks ‒ big, big checks ‒ to startups large and small that are creating everything from business software to cures for crippling diseases.”
And the numbers bear out this assessment: Q2 2015 was the single biggest quarter for VC investments in Silicon Valley since that previous scorcher, the second quarter of 2000, the news source reported.
The enthusiasm seemed to reach fever pitch in the waning months of summer, as many investors practically tripped over one another to cut checks to bullish SaaS founders.
“The returns on investment [in software] are just too healthy to ignore for people who want to put cash into the market,” Mark McCaffrey, a software industry expert with PricewaterhouseCoopers told the news source.
Top 5 2015 Funding Rounds
But the story is not all unicorns and roses. If you’re beginning to feel like all of this sounds suspiciously like a pop-prone bubble, you’re not alone.
Many venture capitalists and market-trackers anticipate that the unbridled optimism in the private investment world is about to get a course correction.
Indeed, most of these experts believe that the course correction will occur in a very prominent (and dangerous) place: the IPO.