My favourite Silicon Valley tech reporter has been taking jabs at techies and VC’s alike about lofty valuations or anything that even remotely spells b-u-b-b-l-e — which although it may seem like she is constantly crying wolf, I think she serves as a good check in place to remind us of why the tech bubble happened, lest we get all sugar high and repeat our mistakes again.
Needless to say, I was grinned when I read this on VentureWire this morning.
Valuations of start-up companies in 2007 dipped for the first time in several years, suggesting that a correction may be in the works amid an economic slowdown.The median pre-money valuation for start-ups across all sectors was $16 million, down from $18 million in 2006, according to data released today from Dow Jones VentureSource.
The sagging numbers weren’t pinned to one industry, as valuations fell across the board. Information technology start-ups saw pre-money valuations fall to $15 million from $18.8 million. Health-care valuations dropped slightly to $19 million from $20 million, while the retail and consumer group showed the biggest decline, with valuations ringing in at $10.5 million versus $15 million in 2006.
“2007 was a year of caution,” said Sandy Miller, a general partner at late-stage firm Institutional Venture Partners. “The first half of the year was bullish, but the second half was cautious. [Venture capital] may be the least impacted part of the [current downturn in] the economy, but nobody leaves unscathed.”
Several investors said that certain sectors of the VC landscape – such as Web 2.0 and clean technology – remain overheated, and the downturn in valuations is more of a natural correction than a sign of impending doom.
No tech bubble, hurray 
It’s ok, Kara. You can put your pitchfork down now.
Or maybe not 