The New Generation of Tech in Silicon Valley

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Lest anyone forget, Silicon Valley remains a valuable tech hub. Recent investments, such as the Warriors’ Kevin Durant’s in cloud computing startup Rubrik, show that the tech industry is alive and strong. In the face of potential new policies, the landscape is likely to change, but growth continues.

In some cases, the old guard is providing guidance for the new Silicon Valley tech startups. For 37 years, investment banker Thom Weisel spearheaded investments in companies like Yahoo and Geocities. Post dotcom bubble, he’s expressing great faith in the new wave of social media, commenting that “the big difference is, these companies, in many cases, are enormously profitable out of the gate.”

New tech companies have certainly caught the eyes of up-and-coming investors. The Warriors’ Kevin Durant recently added tech to his portfolio by investing in cloud computing startup Rubrik. Durant is one of many professional athletes increasing their support of the Silicon Valley companies of today.

“Being in Silicon Valley, I play in front of [tech executives] and run into them at restaurants,” Durant said of expanding his tech investments with companies like Rubrik.

Durant’s umbrella corporation, the Durant Company, has also invested in the financial app Acorns and the on-demand delivery service Postmates.

Meanwhile, official policy may or may not support the new wave of Silicon Valley tech. A recent TechNet study found that cooperation between federal, state, and local policymakers could add one million jobs to the US economy each year if they work together to promote pro-startup policies.

In addition to hoping for more relaxed regulation and opportunities for rising tech companies, CEOs are also set to support expanded H-1B programs for highly-skilled workers coming to the US specifically to work in the tech industry.

However, with anti-immigration policies like the recent rescinding of the DACA legislation, Silicon Valley execs may be out of luck when it comes to adding more STEM-focused professionals to their teams.

Nevertheless, the Silicon Valley of today continues to grow, exhibiting more maturity and innovation since the days of the dotcom bust. Whether it’s taking cues from big names of the past or boldly moving forward with new tech opportunities, Silicon Valley is not about to let a few policy setbacks keep it from holding its position as the hotbed of the country’s technology innovations.

Then and Now: IPOs, Private Equity, and the Next Generation of the Tech Boom

IPOs and the kinds of technology behind them have changed since the golden days of 1990s Silicon Valley.
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The Dot Com bubble of the 90s changed the face of tech and finance in ways that are still affecting these realms today. As the hot new kind of business, tech companies proliferated in the 90s, with the IPO as a rite of passage into the “adulthood” of a “real” business. Some companies, like Apple, Yahoo, and eBay, live on; others crashed and burned when the bubble burst.

Today, tech companies shift to IPOs in different ways and for different reasons than they did in the 90s. Silicon Valley is still booming, but startups are far more likely to turn to individual investors as opposed to IPOs when trying to fund growth. The number and the value of technology IPOs are both way down from the 90s, more resembling what the market saw in the early 80s, albeit with higher amounts of money raised.

Funding in the heyday of the 90s tech bubble came from sources like Thom Weisel’s Montgomery Securities, a private equity firm built on the idea of supporting smaller, more individualized businesses. Like many of those tech superstars of the 90s, however, Montgomery Securities no longer exists—though Weisel himself has moved on to other private equity endeavors in the same vein as the company that started it all.

Part of the reason there was so much energy and enthusiasm behind tech companies of the 90s is that their stock prices soared without any real plan on how to live up to the related, absurdly high expectations. Nowadays, stock prices for tech companies rise or fall based on company profits. In fact, tech company stock is now a bit cheaper than it was then.

Modern investors are also different from their 90s counterparts in that they seem statistically more interested in investing in companies that aren’t already profiting by the time they reach their IPO. According to Bloomberg, of the 206 companies that had IPOs in the US in 2014, 71% had had no profits in the year before their offering.

Unlike the 90s, biotech seems to be where it’s at in terms of rising tech companies these days. Biotech companies tend to have IPOs similar to what you’d see in the 90s: small companies with no revenue but lots of promise, going public to raise the money they need to bring a product to market. That’s pretty specific to today’s biotech IPOs, though; in the rest of the IPO market, Bloomberg says, companies are waiting longer to go public, which is why there are fewer IPOs over all.

We may not be experiencing the sort of tech boom that became an emblem of the 90s, but there are still plenty of opportunities for small companies to make their mark on the world. Whether it’s through individual investors or IPOs, cutting edge tech will always have a place in the market. It’s just that the details of that place are likely to change over time.

Where Are They Now: Silicon Valley Edition

Where are the big names from the days of Silicon Valley now?
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Every industry has its golden days—especially the tech industry, which is always rapidly changing. The dynamic tech industry has seen its share of extreme highs and lows, successes, and fails. With such a rich history, Silicon Valley represents a core part of the American dream and identity. So many entrepreneurs, thinkers, and innovators paved the way for the industry we know today. So who are those legends, and where are they now?

One of the most crucial sectors of Silicon Valley has always been finance. Without it, all those shiny tech companies would never see the light of day. At the beginning, there was Thom Weisel, founder of Montgomery Securities, one of the largest investment firms then in operation. Montgomery Securities, founded in 1978, valued a culture of collaboration, commitment, and self-expression. A finance giant, the company helped launch Thom Weisel’s long career in finance and investment. He went on to found other firms like Thomas Weisel Partners, which remain operational. Today, he is an avid athlete and art collector.

Like Weisel, Mark Cuban is one of the tech boom’s biggest names. Cuban began a career by founding Broadcast.com, a site that allowed users to listen to radio broadcasts over the internet. However, because so few people had access to broadband internet in 1998, the business never really took off and eventually folded. But in 1999, Yahoo bought Broadcast.com for a whopping $5.7 billion, giving Cuban the seed money he used to launch his own career. Today, Cuban owns the NBA team the Dallas Mavericks, Landmark Theatres, and Magnolia Pictures. He is also a “shark” investor on the television series Shark Tank.

At one time, Geocities, founded by David Bohnett, was the third most-trafficked site on the internet, just behind Yahoo and AOL. The site provided users a way to create and customize their own websites, working from templates. Users could add links, music, text, and images. In many ways, Geocities was the first step towards the site metrics and measurement we have today. In 1999, Geocities was also purchased by Yahoo for $3.57 billion. It was never really clear if Geocities was profitable, but it was everyone’s favorite site.

Today, Bohnett is a tech investor with a stake in Fab.com. He is also the Chairman of the Board at the Los Angeles Philharmonic Association.

The tech industry certainly looks different today than it did twenty or thirty years ago, but founders and innovators like these made it all possible.

 

Facebook and Apple Now Offer Egg Freezing to Female Employees

Two technology giants, Apple and Facebook, are now offering women a phenomenal new perk: they are now offering to freeze the eggs of their female employees. This is a great benefit because it allows women to have “high-powered” careers without having to sacrifice the choice of having a family.

Facebook began covering egg freezing very recently, while Apple will begin to offer the benefit in January. This benefit allows women to effectively put their fertility “on ice” until they are ready to become parents. To have a successful career it is often difficult for women to compete because they want to have a family before they grow older. Now, the female employees of these companies shouldn’t have to choose.

While an incredible benefit it is very expensive: each round can cost up to $10,000 and it can cost upwards of $500 to keep the eggs frozen every year.

This is a great benefit for women, which will likely be beneficial for Apple and Facebook as well. These companies hope that offering these great new benefits will attract women to apply for jobs with them. Consider that women make up roughly 51 percent and you can see that having a leg-up on the competition for over half of the population is a huge benefit for recruiting the best talent.

It is important to note that while these techniques do have high success rates, there is no guarantee that this will guarantee women with children in the future. Therefore, doctors recommend that women freeze at least 20 eggs to cover their bases, which requires two rounds.

This comes in the midst of what some are calling a “benefits arms race” in Silicon Valley. Some companies offer their employees as much as $10,000 a year in benefits. 17 percent of surveyed high-tech companies say that they cover gender reassignment surgery.