Benchmark General Partner Bill Gurley said out loud what some in Silicon Valley have been whispering about privately.
"All these private valuations are fake," said Gurley, in remarks Tuesday at the Wall Street Journal WSJD Live conference at The Montage in Laguna Beach, Calif.
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That the outspoken venture capital investor sees private company valuations as out of whack is no surprise — a recent New Yorker profile of Andreessen Horowitz co-founder Marc Andreessen referred to Gurley as the investing rival's curmudgeonly Newman from TV's "Seinfeld."
Gurley reserved most of his passion for the unicorns — those non-public companies with valuations that exceed $1 billion. He said those startups whose executives have no plans to go public should be given a "liquidity discount" of as much as 70 percent to 80 percent of their valuations.
The current inflated valuations of these young companies are making acquisitions and initial public stock offerings difficult.
"Unicorns have priced themselves out of the public market," said Gurley, adding that the valuations are "all on paper. It's all a myth."
He issued a call for startups to return to business fundamentals.
"We need to refocus on building real businesses that are sustainable," Gurley said. "I personally wish the market would bring them all down so that we could get to a more sane place."