In Snap Inc.’s Tumble, Start-Ups See a Warning From Wall Street - By KATIE BENNERMAY 11, 2017 SAN FRANCISCO — A day after Snap posted a $2.2 billion loss and decelerating user growth in its first earnings report as a public company, the repercussions started spreading through the technology start-up ecosystem. On Thursday, Jim Cramer, the investor and CNBC host, said Mr. Spiegel needed to be “hazed” and put through a “gauntlet” by investors because “he is so arrogant.” Snap’s earnings showed that “your house has to be in order before you go public,” Ms. Lynn said. The virulent market reaction turned Snap into a cautionary tale for venture capitalists and start-up entrepreneurs, some of whom are now reassessing the prospects for their companies’ going public and how prepared those companies really are to deal with the aftermath — especially if the start-ups, like Snap, are deeply unprofitable. In another warning sign, Mr. Spiegel, his co-founder Bobby Murphy and Snap’s largest venture investor, Benchmark, sold significant amounts of their stock when the company went public, which Ms. Smith said was unusual. In venture capital offices and at some start-ups across Silicon Valley, investors and entrepreneurs made Snap’s performance a subject of much talk — and their conclusions were not particularly positive.
