From PEhub, May 27, 2015:
Mary Meeker is a growth investor at Kleiner Perkins Caufield & Byers, a board member at Lending Club and DocuSign and a former Wall Street analyst with a 19-year stint at Morgan Stanley.
Few people can offer a better perspective on the runaway valuations
now defining segments of private company investing. That’s what makes
her annual Internet Trends Report, unveiled this morning at the Code Conference, so timely.
Here are several of her observations:
- “There are pockets of Internet company overvaluation, but there are also pockets of undervaluation.”
- “In periods of material business disruption…company creation
typically goes through a boom > bust > boom-let cycle while wealth
creation typically goes through a boom-let > bust > boom cycle.”
- The “race is won by those that build platforms and drive free cash flow over the long term (a decade or more).”
Meeker didn’t say in her report where she sees undervaluation and
overvaluation, nor did she apply her boom/boom-let observation directly
to the current cycle.
But she offered the thought that very few companies will win, even
though those that do can win big. And she pointed out that business
value is linked to the present value of future cash flows.
Meeker supports her case with the observation that last year was a
substantial peak year in the present cycle. Overall technology funding —
the combination of U.S. listed technology IPOs and global technology
venture capital investing — was just 33 percent below funding in 2000
and 17 percent above funding in 1999....MORE
