IT'S OVER: The 'unicorn' era comes to a screeching halt
But now it looks like winter is coming to Silicon Valley.
Fortune's Dan Primack went to San Francisco this week and met with a number of people involved with unicorn companies with ballooning valuations.
He says the mentality of people in Silicon Valley is starting to change, and people are getting scared.
"As in the past, they are nearly unanimous in sentiment," he writes. "The difference now is that their sentiment is fear."
Primack writes:
It should be noted that Primack is one of the best reporters on private equity and venture capital. He's really plugged in, and he's not an alarmist.
There's been a growing sense that the Fed could soon raise interest rates, which would impact startup investing. More importantly: Successful VC-backed tech sector IPOs have been few and far between. Just this week, flash-storage provider Pure Storage went public, but began trading below its $17 IPO price, and closed the day at $16.01.
The public markets are more harsh than private markets. This means private investors need to reset their expectations, which is leading to downward valuation pressure.
It certainly seems like this is the beginning of the downturn in the private tech sector that VCs like Benchmark's Bill Gurley have been warning about for a year now.
Read Primack's full story here.