Tomasz Tunguz Blog · 2014-12-05
· 4199d
Tech Bull Market Fundamentals: Supply, Demand, and Exit Market Dynamics
Tomasz Tunguz analyzes the drivers of the tech bull market, identifying three fundamental strengths: massive economic opportunities from technology adoption, abundant VC capital, and vibrant exit markets. The primary risk to continued growth is public market repricing of tech valuations, which would cascade through private markets and compress returns across all funding stages.
Metrics in this report
Cloud IT Budget Penetration
2%
current
Enterprise IT spending allocation
SaaS Forward Revenue Multiple
8x
Q1 2014
Public SaaS company valuations
SaaS Forward Revenue Multiple
5x
Q2 2014
Public SaaS company valuations after rotation to value
SaaS Valuation Decline
33%
quarter-over-quarter
Basket of 40 publicly traded SaaS companies Jan-Mar 2014
VC Fundraising Pace
14years
fastest pace in
Startup financing activity
VC-Backed Tech Company Beat Rate
70%
Q3 2014
Publicly traded VC-backed tech companies exceeding expectations