There's a cool new trend sweeping Sand Hill Road and it's called self-doubt. Just look at your Tweetdeck. Everybody who's anybody is suddenly spazzing out. According to the Silicon Valley Venture Capitalist Confidence Index, confidence levels have chilled for the first time since early 2012.
The survey, which is conducted by the University of San Francisco, says venture capitalists' confidence dropped to 3.89 (on a 5-point scale) in the third quarter of 2014 In the second quarter, it was 4.02.
There's "increasing concern about the future of the IPO exit market" as the stock market has fluctuated recently, Cannice said in an interview.
Other fear factors include high valuations and high burn rates. The financiers who capitalized those inflated valuations and incendiary burn rates changed their tune recently and decided to tsk-tsk the irrational exuberance fostered under their watch.
"While the engine of innovation is running at full speed, there is considerable risk of overheating, particularly in consumer sectors," he said. "The excess of capital available to these companies is inflating both valuations and their wage costs. The laws of gravity remain universal and, at some point, we can expect to see a reconciliation between hype and hope."
See, VCs just needed a little reminder that gravity applies to them too.
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