I was listening to friends talk about a particular segment of the start-up market. They said it’s a bad market. All the companies operating in this market won’t make it. Because it’s a bad market and the companies in it are unprofitable, none of the companies are worth anything, and they should be avoided at all costs. They all agreed. It seemed harsh. I thought, The sentiment on this market is bad.

I believe that the market my friends were discussing is near the trough in its market cycle. They’re likely right that many of the companies won’t make it. But they shouldn’t throw the baby out with the bath water. Some companies are risky but promising. Their upside is more probable than their downside, given how bad sentiment is.

I’m going to spend some time trying to find these companies.