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.

6 metrics· Cited 0× in the knowledge base ·Open source ↗

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