Gurley states that only three out of 25-30 IPOs this year were unprofitable at launch.
“I think of the 25 or 30 this year, three were not profitable at the time of going out.”
Gurley identifies an angel glut a year ago with companies raising $5 million in seed unable to get Series A.
“In fact, starting about a year ago I think there was probably what you might call an angel glut of companies who had maybe raised one, two, we've seen companies with $5,000,000 of convertible seed money. That's a lot of seed money who can't raise series A.”
Gurley says massive multiple contraction happened across the industry, not due to company performance but market repricing.
“Like, it just happened. There was massive multiple contraction writ large across the industry, and the companies have to navigate it.”
Gurley notes early internet startups shifted from Oracle and Sun to alternatives within five years
“When all of the venture backed companies got started on the Internet, they were all on Oracle and Sun. And five years later, they weren't on Oracle or Sun.”
Gurley observes venture's loose money trend has persisted beyond the zero interest rate period unexpectedly.
“There's been a trend in venture recently. Recently. I I thought thought it it was was the the zero zero interest interest rate rate thing that caused it, but it's sustaining beyond that.”
Gurley argues the belief that AI is the biggest platform shift ever is driving current market behavior.
“I think post LLM, the world believes, and I think this is my fifth point or something, but the world believes AI is the biggest platform shift in anyone's lifetime.”
Gurley estimates 98% of venture capitalists are exclusively focused on AI investments right now.
“From where I sit, 98% of venture capitalists are only looking at AI and they're AI all day long, they don't wanna see another business”