Silicon Valley's cash party is coming to an end

Silicon Valley's cash party is coming to an end

Dominik Pabis | Getty Images Silicon Valley is cooling, not crashing. Valuations are falling. The era of cheap money is over. Based on interviews with about two dozen venture capitalists and tech investors, 2016 is shaping up to be a year of reckoning for scores of technology start-ups that have yet to prove out their business models and equally challenging for those that raised money at unjustifiably high prices. "It's been surprising to see how quickly valuation expectations are recalibrating," said Craig Hanson , a partner at Next World Capital in San Francisco. "Rounds will be harder to raise, valuation multiples will be lower and, in many cases, companies will have to demonstrate metrics that back up the big projections they promised before." Or, as Todd Chaffee of Institutional Venture Partners describes the environment, "The cheap capital party is over, but there are a few drunk sailors who didn't hear last call." The downdraft began in mid-August,

Read full article from Silicon Valley's cash party is coming to an end