Thursday, October 29, 2015

Current Event #4

Tech Startups Feel an IPO Chill

During the 1990's technology companies were in high demand by financial backers. Investors found startup tech companies to be easy flips to make a quick cash out with little work. People began to act like sharks and jump on any startup company, good or bad, and get them to enter the public market as soon as possible. This time was known as the "Dot Con" era. Fast forward to today, and technology companies are starting to get the cold shoulder from investors. Instead of being treated as royalty, tech companies now have to survive the proving grounds of any other startup company and get to a stable point financially before investors will back them. One company that is starting to feel this pressure is Dropbox. Instead of cashing out like many other tech companies of the past, Dropbox is now forced to continue to improve its services and begin to branch out with more products in order to keep up its value. While this change in the market may be negative for startup companies becoming successful, it will help to improve the quality of the software being created. It makes me think of the parable of the wheat and the tares in D&C 86 where the good companies will be invested in and the bad companies will disappear.

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