Andy Neumann is CEO of WeWork.
New York has long looked on with awe at the spectacular valuations given to venture-backed startups in Silicon Valley: $62 billion for Uber, $25 billion for Airbnb, $10 billion for Dropbox. Though New York is now No. 2 in venture-capital investment, it has a mere 15 "unicorns"—companies valued at more than $1 billion—to the Bay Area's 58, according to Pitchbook.
But that may be a good thing. Those megabillion-dollar startups are too expensive for anyone to buy, and the tech IPO market is dead: On average, the 85 venture-backed companies that went public in 2015 are now trading 23% below the prices at their IPOs, according to Renaissance Capital. Highly valued companies burning through their cash may have to take on new funding at worse terms—or go public for a lot less than their private valuation, as San Francisco-based Square recently did.
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