Protecting Both Business Finances And Futures

Are we headed for a tech startup bubble?

On Behalf of | May 9, 2015 | Contract Disputes |

Depending on where you are on the scale of businesses, there could be bubble waiting to burst for startup companies. After all, there is a surge of very new, popular businesses that are gaining traction in the marketplace. If you have heard of Uber, Fitbit, SpaceX or Vice, you are probably a consumer of their products and services. If you haven’t chances are that you will hear about them if they issue initial public offerings in 2015.

While these and other businesses offer exciting possibilities for investors, there could be a sharp drop off reminiscent of the great dot com crash of the early 2000s. After all, there have been warnings throughout the tech industry that there may be a problem with so many small companies attracting so much financial backing without really having any real value. In reality, not every company can succeed, so there may be a loser where it appears a win is inevitable.

But one investor is ignoring the warnings. In fact, he is issuing a $100,000 bet that several so-called “unicorns” (companies valued at more than $1 billion) will be worth more than $200 billion altogether within five years. With a wager that large, it bodes well for other companies that are vying for funding.

This means that startup companies must have strong legal guidance to help them understand the implications of funding as well as how legal issues can thwart growth. In a financial climate like this, it is important to maximize the opportunities available.



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