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This 20-Year-Old Article Explains So Much About the State of Silicon Valley Today

November 18, 2019, 2:13 PM UTC

This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.

Profitability has lately been a hot topic in the tech world. But it’s hardly a new headache. One Term Sheet reader unearthed a New York Times article from 20 years ago that rings eerily familiar: “So Lucrative That It’s Almost Profitable.”

Michael Granoff, founder of Israel-based venture capital firm Maniv Mobility, wrote in and said he vividly remembered reading the satirical piece from 1999 by a writer who had a plan for a “business:” selling $100 bills on the internet for $95. The following year, he planned to raise the price to $96 and tell investors that he cut losses by 20% in just one year and was clearly on a path to profitability.

Here’s an excerpt:

“We’ve all read stories about ‘businesses’ without profit (or even the near-term prospect of profit) that have market capitalizations in the billions. Wall Street’s analysts value these companies based on revenue growth, volume, and more exotic measures heretofore unheard of: ‘eyeball counts,’ ‘traffic,’ ‘click-through rates,’ and the like. Most investors nervously justify the companies; huge losses as ‘investments’ in creating a brand name: the theory is that once Web sites’ owners build a loyal customer base, they will — no one says when or how — find a way to turn a profit.”

Venture capital firms that fund “unicorns” have had a much higher tolerance for forgoing profitability for growth, but as more and more of these unicorns trot to the public markets, the sentiment has begun to change. 

In the days of the Times article, public market investors expected companies to become profitable within 18 months of their IPOs. In recent years, this timeline was loosened, with fast-growing startups making their public debuts with S-1s that warned: “We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability.”

Little did the New York Times writer Neal Masia know about the cheap capital, skyrocketing valuations, and overall excess that 2019 would bring. Yet history repeats itself and proves that we’re still partying like it’s 1999.

Granoff shared the full article here, noting: “In the age of WeWork, this is a lesson once again worth understanding!”

…SPEAKING OF WEWORK: The company may cut at least 4,000 of its employees, approximately a third of its workforce, according to The New York Times. The staff reductions will reportedly be announced as part of a five-year plan to overhaul WeWork. Oh, and John Legere is no longer a candidate for WeWork’s chief executive role.

Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com 

VENTURE DEALS

- Corsa Security, a Canada-based provider of scaling network security solutions, raised C$11 million ($8.32 million) in funding, from Roadmap Capital.

- FanAI, a Santa Monica, Calif.-based performance sponsorship data platform, raised $8 million in Series A funding. Marubeni Corporation led the round, and was joined by investors including Allectus Capital, CRCM Ventures, Courtside Ventures, GC Tracker Fund, M Ventures, Sterling VC and GFR Fund.

- Kikoko, an Emeryville, Calif.-based cannabis wellness company for women, raised $8 million in Series A funding. Bengal Capital led the round, and was joined by investors including FlowKana.

- SimpleCitizen, a Salt Lake City-based provider of digital immigration and visa solutions, raised $5.8 million in funding. Kickstart Seed Fund led the round, and was joined by investors including Pelion Ventures, Peterson Venture Partners, TSVC, Y Combinator, AppleTree Capital, Kima Ventures, Comcast Ventures and Investo.

- Habi, a Colombia-based technology-driven real estate company focused on Latin America, raised $5.5 million in pre-seed funding. Tiger Global Management led the round, and was joined by investors including Homebrew, Zigg, Reshape Holdings, FJ Labs, and Supernode Ventures.

- Lalilo, a France-based developer of a free online tool that includes 3.000 adaptive exercises in phonics, word recognition, and comprehension, raised $5.5 million in funding. Investors include Partech Ventures, EduCapital, and Citizen Capital.

- Track160, an Israel-based optical tracking based sports analytics company, raised $5 million in Series A funding. ADvantage Sports Tech Fund led the round. 

- Memfault, a San Francisco-based provider of a cloud-based monitoring solution for hardware devices, raised $2.5 million in seed funding. Uncork Capital led the round, and was joined by investors including S28 Capital and Y Combinator.

PRIVATE EQUITY DEALS

- Cerberus Capital Management acquired Off Lease Only, a West Palm Beach-based used car dealer. Financial terms weren't disclosed.

- Reconstruction Experts Inc, a portfolio company of Linx Partners, acquired Advanced Roofing & Sheet Metal, a Fort Myers, Fla.-based provider of roofing and HVAC services and solutions serving multi-tenant housing developments in Southwest Florida. Financial terms weren't disclosed. 

- Hanover Partners acquired Westside Equipment Company, a Madera, Calif.-based maker of tomato harvesting and pistachio harvesting equipment, as well as related aftermarket parts. Financial terms weren't disclosed. 

- HKW acquired John M. Floyd & Associates, Inc, a Baytown, Texas-based provider of software and consulting solutions designed to optimize overdraft programs for regional/community banks and credit unions. Financial terms weren't disclosed. 

- Mercer Global Advisors Inc. acquired AL Hewitt Inc, a Camarillo, Calif.-based comprehensive wealth management firm. Financial terms weren't disclosed. 

OTHER DEALS

- Elavon will acquire Sage Pay, a U.K.-based payment processors, for £232 million in cash ($300 million). 

EXITS

- Ethos Capital agreed to acquire Public Interest Registry, a Reston, Va.-based manager and operator of the .ORG domain, from Internet Society. Financial terms weren't disclosed. 

- Equistone Partners Europe agreed to acquire Amadys NV, a Brussels-based provider of passive network equipment solutions to utility segments in Belgium and surrounding countries. The seller was Vectis Private Equity. Financial terms weren't disclosed. 

FIRMS + FUNDS

- Northzone, a Norway-based private equity and venture capital firm, raised $500 million for its ninth fund, Northzone IX.

- MMC Ventures, a U.K.-based research-led venture capital firm, raised £100 million ($130 - million) for its Scale Up Fund. 

PEOPLE

- Skyway Capital Markets named Henry Schmitt as managing director. 

- Jason Risch joined Greylock Partners as an investor on its enterprise team. 

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