The recent problems with IPOs are changing the way people are looking at 'disruptor' companies

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Recent highly publicized flops by supposedly disruptive companies could be painting an unpleasant picture ahead for innovation.

It either could be a temporary blip ahead of some industry shake-outs, signs that deeper distress is ahead as investors demand more than flavor-of-the-week innovation, or simply the market engaging in healthy price discovery after a period of overexuberance on unicorn companies.

"When it comes to 'platform' companies, venture capital has done a generally terrible job building these businesses into viable companies," Colas wrote. "WeWork, Uber and Lyft raised a combined $43 billion from VCs. Yet for all that capital, none of these companies developed a business model that could reliably generate profits or even show meaningful progress to that goal without a deus ex machina innovation like self-driving cars.

Former Nasdaq CEO Bob Greifeld said the IPO market at least shouldn't be written off too quickly, despite this year's difficulties. Still, he said private companies with disruptive technologies looking to come to market should take heed of recent developments.

 

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