Market History Says a Recession Could Produce the Next Airbnb Or Slack

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The Silicon Valley startup economy has been decimated by rising interest rates and the market downturn, but some of the best tech has been born of recession

," which pointed to sustained inflation and geopolitical conflicts that would limit the ability for"quick-fix" policy solutions like slashing interest rates or quantitative easing.

"Investors continue to invest in innovation at times like this," said Kyle Stanford, senior analyst at PitchBook. But he added that it's most apparent in the difference between the seed and late-stage venture growth. Previous recessions have ultimately produced dominant tech companies, including iconic names like Hewlett Packard, Microsoft and Electronic Arts. During the 2008-2009 downturn, specifically, tech unicorns were created at a total value of $150 billion, according to Startup Genome, including 24 Disruptor 50 companies. Airbnb, Block, Pinterest, Slack and WhatsApp, among them."Late-stage venture is in a difficult spot," Stanford said.

 

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