Former Uber board member and VC Bill Gurley says it's time for Silicon Valley's unicorns to 'grow up' and get profitable

Tech venture capitalist Bill Gurley thinks Silicon Valley 'unicorns' are growing up and realizing they need to be profitable.But he also said that recent tech IPOs like Snap Inc.'s will lead private unicorns to possibly delay going public out of fear.Silicon Valley's most valuable startups are realizing that they need to "grow up," according to longtime tech VC Bill Gurley."As many of the unicorns mature in age, many are coming to the recognition that they need to grow up, get profitable, go public, or do something along those lines," Gurley said during an interviewon CNBC on Friday, referring to the 'unicorn' startups that are valued by private investors at $1 billion or more."This silly notion of were going to stay private forever is not going to play out in a positive way," he warned.Gurley's perspective has some bias. As a venture capitalist who invests in startups, he needs those startups to IPO (or get acquired) so that he can reap his returns. Butas the tech IPO market regains momentum after a slow 2016,and in the wake of a few high-profile techflameouts this year,Gurley's wordscome at an important time forstartupsconsidering their next steps.Gurley's venture capital firm, Benchmark, is best known for its early investments in companies like Uber, Snap, Twitter, and eBay. Gurleywas a member of Uber's board until Benchmark helped force the removal of ex-CEO Travis Kalanick earlier this year."2017 has been a very difficult year," Gurley said on CNBC when asked about Uber. "And its been one where weve been working quite diligently behind the scenes to try to move things forward for the company." Benchmark sued Kalanick in August amidst a power grab for Uber's board seats that ultimately led to the hiring of now-CEO Dara Khosrowshahi.Afraid to play in the public marketsSinceKhosrowshahi came on board, Uber has publicly committed to aim for a 2019 IPO.The fate of tech companies entering the public markets this year has been mixed. Video streaming company Roku has seen its stock more than double since going public in September. And enterprise tech company's SendGrid jumped 14% on its IPO this week. But the most high profile IPO of the year has not fared so well. Snap Inc, the parent company of Snapchat, has gotten crushed and is trading well below its $17 IPO price.When asked about the dismal debut of Snap, one of Benchmark's investments, on Wall Street earlier this year, Gurley said the eventcould cause other unicorns to be afraid of going publicamove he compared to graduating from college to professional sports."I think youre going to see a large number of unicorns who were afraid to play on Sunday, afraid to play in the public markets, that didnt get their act together in time," he said. "Didnt get profitable. Didnt understand unit economics and hurt the value of the equity as a result."You can watch Gurley's full interview on CNBC's website.SEE ALSO:Snap has spent $352 million on acquisitions this year ' here are all of the startups it's bought so farJoin the conversation about this storyNOW WATCH: Zillow and Hotwire founder Spencer Rascoff led his startups through major crises to massive profits
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