A startup 'extinction event'
And more of the week's best financial insight
A free daily digest of the biggest news stories of the day - and the best features from our website
Thank you for signing up to TheWeek. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.
Here are three of the week's top pieces of financial insight, gathered from around the web:
How private equity ate the market
The number of publicly traded U.S. companies has fallen by more than half since 1996, said Nicole Goodkind at CNN. "Back then, the number exceeded 8,000 companies." Today, the count has dropped to just 3,700, according to data from the Center for Research in Security Prices. "It's not that America has half as many companies as 30 years ago — it's that companies are increasingly staying private." The IPO market fell by nearly 95% in 2022 after lackluster returns the year before. There are also "about five times as many private equity-backed firms in the U.S. as there are publicly held companies," holding more companies back from listing. In 1999, the average U.S. tech firm went public after four years. It's now about 11 years.
A startup 'extinction event'
More startups are "throwing in the towel," said Yuliya Chernova in The Wall Street Journal. The ramp-up in interest rates, making borrowing more expensive, is taking its toll on small businesses as "fresh capital from venture investors and bank loans" becomes harder to come by. "Startups in the U.S. raised $37 billion in the first quarter of this year, down 55%" from the same period a year ago. The longer the market stays depressed, "the closer many startups get to the moment of truth." Several high-profile tech startups have already folded or entered a wind-down process, including Zume, a "robotic pizza maker once valued at $2.25 billion." One partner at a major venture capital firm calls the wave of closings a "Mass Extinction Event for startups."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
More homebuyers turn to cash
The share of homebuyers paying all cash in April was the highest in a decade, said Al Yoon in Insider. "Cash buyers represented 33.4% of transactions in April," Redfin reported last week, "far above levels hovering around 25% for most of the past decade." Realtors are "battling the perception that the cash offer is always king" in order to keep borrowers from giving up. But in a shrinking housing market, where the "total number of homes on the market is 5% lower than last year," the competition is tight. "People who needed financing" were already "foiled by rising interest rates." Now any advantage for cash buyers may be amplified even more as banks tighten credit after the March bank runs.
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.
Sign up to our 10 Things You Need to Know Today newsletter
A free daily digest of the biggest news stories of the day - and the best features from our website
-
Mercy killings: what new CPS guidance means for assisted dying law
The Explainer Prosecutors detail circumstances when it is appropriate not to bring charges
By Chas Newkey-Burden, The Week UK Published
-
The daily business briefing: October 6, 2023
Business Briefing Exxon Mobil is close to deal to buy shale-driller Pioneer, the SEC sues Musk for testimony on Twitter stock purchase, and more
By Harold Maass Published
-
Laurence Fox: cancelled by GB News?
Talking Point Demise of controversial commentator hasn't deflected criticism of the broadcaster
By The Week Staff Published
-
Pharmacy workers are swapping pills for picket signs
Under The Radar Why drugstore and health care employees across the country have been striking
By Justin Klawans Published
-
A surge in surge pricing
Feature And more of the week's best financial insight
By The Week Staff Published
-
Retirees’ biggest surprise expense
Feature And more of the week's best financial insight
By The Week Staff Published
-
The auto strike, by the numbers
The Explainer The pay gap between Big Three automakers' executives and UAW members has workers pushing for higher wages
By Justin Klawans Published
-
A downside of starting a business
And more of the week's best financial insight
By The Week Staff Published
-
The best age for financial choices
feature And more of the week's best financial insight
By The Week Staff Published
-
Locked down: stores struggle to deter rising thefts
feature Just how bad of a problem is shoplifting?
By The Week Staff Published
-
Why auto workers are on the brink of striking
Speed Read As the industry transitions to EVs, union workers ask for a pay raise and a shorter workweek
By Joel Mathis Published