Mini-Essay: “2022: The Great Correction”
There is a growing feeling that a Great Correction is coming. This is due to a combination of factors: business and economic cycles, Fed actions to suppress inflationary pressures and frankly out-of-control valuations and funding rounds. The Twittersphere is well, a-twitter, with the fact that we have hit the “top” of the business cycle and loves to show signs of it where they can (see no/low revenue stocks like Rivian). The thesis is that a Correction is coming, and the obvious derivative thesis is this Correction would have a significant impact on the healthcare services landscape.
What you need to believe is that public markets corrections have trickle-down impacts on the startup funding environment, exit potential and customer’s ability to buy — most saliently these impacts fall on the Unicorn Private Healthcare Services Companies (it’s healthcare so let’s pick a simple acronym like UPHSC for short). Both the valuations and exit potential of the UPHSCs may be diminished.
The key here is the UPHSCs are a bellwether for the industry in terms of where the excitement is and what gets funded by VCs. Assuming you like these companies, you should be rooting for their success, not for the bubble to pop and for them all to flounder, because their success (M&A, IPO or PE-acquired), ultimately helps your startup’s chances directly or more likely indirectly. Wins bolster confidence in the sector and grow the ecosystem overall. Also, I’m just an optimistic guy who likes to root for others.
However not all can succeed in a Great Correction environment. There will be Winners and Losers.
What do you think will happen to each of these Unicorns? Particularly, who is in Bucket #4?
“In ’22, under a Great Correction Environment, these Unicorn Private Healthcare Services Startups will…”
FYI, this is simply a copy and paste of content that I put on my Twitter account ( 👇). Check me out there @Rsiddhanti > would always value your feedback!
