Bill Gurley, the Benchmark Capital investor who backed Snapchat and Uber, is uber-bullish when it comes to his own portfolio. But the rest of Silicon Valley, he says, is not nearly frightened enough: "No one's fearful, everyone's greedy, and it will eventually end."

In an interview with the Wall Street Journal, Gurley explains how "excessive amount of risk right now" will lead to that pesky popping sound that most current day founders have never heard.

1. Companies raising exorbitant amounts of venture financing are compelled to set that money on fire as fast as possible:

There's a phrase that I love: "discounted risk." Do people discount risk? Right now you've got private companies raising $200, $400, $500 million. If you're in a competitive ecosystem and you raise that amount of money, the only way you use it—because these companies are all human-based, they're not like building stores—is to take your burn up.

And I guarantee you two things: One, the average burn rate at the average venture-backed company in Silicon Valley is at an all-time high since '99 and maybe in many industries higher than in '99. And two, more humans in Silicon Valley are working for money-losing companies than have been in 15 years, and that's a form of discounted risk.

2. Wall Street is there at the end of the IPO tunnel, chanting "Burn, baby, burn!":

In the software-as-a-service world, where the risk is potentially among the highest, Wall Street has said it's OK to lose tons of money as a public company. So what happens in the board rooms of all the private companies is they say, "Did you see that? Did you see they went out and they're losing tons of money and they're worth a billion. We should spend more money." And there are people knocking on their door saying, "Do you want more money, do you want more money?"

3. Like a trust fund kid, CEOs might not even know how to make do with less:

Right now, the cost of capital is super low here. If the environment were to change dramatically, the types of gymnastics that it would require companies to readjust their spend is massive. So I worry about it constantly.

4. If the other startups jump off a bridge, you have to too:

That's really difficult because if you have a competitor that's going to double or triple down on sales and you just decide, "Oh, well I'm not going to execute bad business decisions, I'm just going to sit back," you lose market share. So, choosing not to play the game on the field doesn't work, so you're left with trying to advise someone to be pragmatically aggressive with some type of conservative backdrop or alternative strategy in case the world shifts. But it's hard.

5. A "world shift" means Silicon Valley will look less like 1999 and more like the 2000:

I do think there is a high likelihood that we'll see some high-profile failures in the next year or two. I actually think that could be healthy for the ecosystem. You remember in March when the IPO window closed for like three weeks and everyone thought that the world was coming to an end? Like you really have to work hard to remember it because it reversed itself so quickly. I think having events like that can lead to sanity.

Yo, Bill Gurley just called you crazy.

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