What is the tech startup bubble? It is an investment phenomenon that involves a clear, though unstable market rise in tech stocks, due to increased speculation. IPO flops and billion dollar technology acquisitions have led experts to debate the existence of a tech startup bubble. We have seen examples over the years of technology companies that had a high share price, that quickly fell due to them being unprepared to meet the demands that came with going public. For example, pets.com, an amazon.com-backed company, had stocks at $11 per share, until they were losing money on orders due to high shipping costs and low demand. The company collapsed nine months later, and shares had been going for $0.19 a share.
People believe that this bubble may be around now, for a few reasons. Three out of four venture-backed startups don’t return investors capital and 95% of startups don’t meet their projected return on investment (ROI) revenue growth.
To learn more about the tech startup bubble, why it may or may not exist, and some alternatives in the infographic below, presented by BizBrain.org.