Slow economic growth in Europe is making U.S. technology firms more attractive as takeout plays. They are all desperate for growth, said David Golden, partner at Revolution Ventures.
"All of these companies whether in Europe or the U.S. are fundamentally valued on their growth prospects," said Golden. "If they can't grow locally in Europe then they are going to be looking for other markets where they can grow and that will be predominantly in the U.S."
Golden said some of the high profile names from the second wave of Internet companies are the most likely targets. As valuations adjust, he said companies includingTwitter (TWTR) - Get Report , Yelp (YELP) - Get Report , GrubHub (GRUB) - Get Report , Groupon (GRPN) - Get Report and GoDaddy (GDDY) - Get Report could see some interest.
"All those are facing increased pressure to grow and difficult markets in which to do it," said Golden, adding that he has no knowledge of any particular negotiations but he would not be surprised to see one or more of those outfits to go by the wayside in the next year.
As to the latest technology venture plays, Golden said he is more interested in the sharing economy than virtual reality or something Pokemon related. He said he likes areas that involve people "sharing assets without owning them."
Valuations for startup technology companies remain "challenging," according to Golden. However, he said the market is starting to "return to sanity" after the bidding wars in 2014 and 2015.
"For the past couple of years, the private markets were paying a premium for a private security that was completely illiquid and those valuations are starting to come back to earth and that is good because the companies are very solid and very inventive," said Golden.
Finally, Golden said the successful initial public offerings of Twilio (TWLO) - Get Report and Line (LN) - Get Report this summer should help open up the market for more new offerings, especially now that Britain's Brexit vote is history. That said, investors should not expect a stampede of unicorns ready to ring the bell at the New York Stock Exchange anytime soon.
"If you took the 90 or so unicorns in the U.S. and tried to float 10% or 15% of their market caps then it would take about six years for the normal IPO market to digest all that capital," said Golden.