Volatility isn't just shaking up Wall Street. The tech world is also feeling the aftershocks of the stock market’s turbulence. But one venture capitalist sees buying opportunities.
“It’s certainly been a roller coaster in the last few weeks and we’re feeling the effects in Silicon Valley,“ said Ajay Chopra, general partner at Trinity Ventures.
The Nasdaq Composite is weaving in and out of gains for 2015. Since many angel investors’ wealth is tied to the equity markets, the venture capitalist sees investors cooling on putting their money to work.
“I think we’re definitely entering a period of moderation," said Chopra. "We feel that we still have to invest but we have to be cautious about it. I think valuations are going to moderate."
But similar to how some stock investors view the market’s volatility as an opportunity, the downturn is also presenting an opening out West as well, according to Chopra.
“For venture capital investors, it’s a great opportunity to pick up some interesting assets on the startup side,” he said. “As an example, in 2008, 2009 downturn, we made investments in companies such as New Relic (NEWR), Zulily (ZU), TubeMogul (TUBE), all of whom have gone public and they were terrific investments for us, all made during the downturn."
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The 25-year veteran Silicon Valley insider who suffered through the big tech bubble burst in 2000 is confident that the “truly gritty…will be very successful in this period.”
Chopra advises startup entrepreneurs to “keep your head down on business, make sure you’re building companies that are going to create enduring values, make sure you preserve cash, and raise as much cash as you possibly can when you have the opportunity to build a company in the way you want to build it.”
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