Global markets still shedding value

Top News

• Tech stocks get hammered: Technology shares bore the displeasure of investors yet again today. The Nasdaq lost 5.8%, while the cloud-heavy Bessemer index fell a similar 5.7%. Markets around the world also shed value as new American trade barriers began to attract responses. For tech companies looking for an exit, the downward pressure on equity prices and staggering loss of market confidence will not help.

• TikTok gets a (possible) reprieve: It’s still not clear if the President of the United States has the authority that he is claiming, but nonetheless, today Trump said that he was giving TikTok another 75 days to get its affairs in order. Recall that TikTok faces a divest-or-ban situation, and went dark for a few hours earlier this year before POTUS came to its rescue.

• OpenAI shakes up its model release plans: As Google crows about the success of its Gemini 2.5 model, OpenAI said today that it has changed its mind, and will release its o3 and o4-mini reasoning models. GPT-5, the much-awaited successor to GPT-4, will land in “a few months” according to the company. Anthropic dropped Claude 3.7 the other day. No matter what is going on with the macro world, AI is marching ahead.

TWiST500

Amidst all the macroeconomic drama, there are real impacts for the technology world that are immediate and concrete. One of the first — apart from seeing the value of technology companies collapse — is a retreat from IPOs.

Klarna, a TWiST500 company that could land a $10 billion or greater exit, has put its IPO plans on pause. It’s not hard to guess why, nor is it a surprise to see potential IPOs at least tapping the brakes. For the sake of spelling it out: Falling equity prices mean potential IPO valuations are trending down (bad), trade uncertainty implies that companies are uncertain about their future revenue growth and profitability (bad), and general market chop lowers confidence, meaning that founders on the fence about going public are simply less likely to gamble.

RIP the Great 2025 Liquidity Cycle, slowed to halt just as it was really getting going!

Before we head out into the weekend, it’s worth considering the second-order effects of the market selloff. Venture LPs are now poorer. That’s bad for new fund formation. And, venture capitalists themselves are now stuck with paper wealth once again, when they desperately need to convert some of the TVPI to DPI. Buy your friendly, local VC a coffee: they might only have anticipated wealth for the time being. — Alex

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This Week in Startups

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