Fintechs Face Reckoning As Easy Money Dries Up


The venture capital world is in the grip of a silent crash.

Unlike the stock market, there are no daily market indices to broadcast the pain, and no individual share prices for anxious tech employees to watch as their personal wealth evaporates.

In fact, for many of the investors and entrepreneurs who have just lived through a historic boom in venture investing, it is even possible to pretend a crash isn’t happening at all. Loose rules that require only sporadic writedowns, the estimated value of private companies, have made it easy for many to turn the other way.

Josh Wolfe, co-founder of Lux Capital, likens the response to “the classic five stages of grief”. “We’re probably somewhere between anger and bargaining,” he says, referring to the emotions that follow denial. Yet investors and company founders, Wolfe adds, are still resisting the full implications of a market downturn that will have a profound effect on the start-up economy.

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