While few companies experience the smooth lines, they serve to illustrate the point. Most quoted companies sit in the rapid growth to decline stages, with some experiencing death or reinventing themselves. If we consider the market as a whole, company performance is affected by both micro effects (what they can do for themselves) and macro effects from the local, national or global economies.
Venture capital companies are doing different things. They are developing their first product, finding their first customers, or seeking product/market fit. Failure to cross the dip, the so-called valley of death, shortcuts the whole of the left-hand cycle. These are hard regardless of the state of the economy – so the performance of venture capital companies is dominated by micro effects.
