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Winter is coming

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Re: Winter is coming

#21

Post by Symmetry »

TomOfTTB wrote: post #9

I don't agree with much of this for two reasons... 1. The bubble for already funded companies burst in the 90s but that didn't dry up funding. The truth is a wealthy person's best bet in a down economy is a small startup. Because the potential upside is so much better than any other investment. A company like Y Combinator can literally fund hundreds of startups and as long as at least one has a significant payday at…

No idea why people downvoted you...

It usually doesn't make sense for a startup to borrow a significant amount of money in a currency whose value is dropping.

I disagree with this though. Depreciating currency is awesome if you've got debt financing, because all of the value of your debt drops, but you only lose the value of the money you haven't spent yet. OTOH, it might be bad because uncertainty about depreciation will cause financiers to be reluctant to give you good terms.

Now, it certainly is a bad thing when you're getting equity financing, but that really isn't "borrowing".

Re: Winter is coming

#22

Post by Hisoka »

timmyd wrote: post #18

Its funny that in 2008 - we see posts like "RIP Good Times" - http://techcrunch.com/2009/10/06/r-i-p-good-times-one-year-l... - and yet nothing - fundamentally - came of it. I'm sure Sequoia's companies left that meeting - scared, sacked a bunch of employee's, cleaned out the closest - and the VC's were happy because the capital lasted longer ensuring no more dilutions for themselves and a "trimmer" business even if…

Exactly my thoughts... wasn't 2008 doomsday?? If so.. doesn't that mean it's GONNA be summer soon (let alone summer came and freaking passed...)?

I think we should stop the macro outlook and worrying. It's pointless. Focus on what you're doing right now, and producing something of value. In most cases, what you have control over day-to-day, whether it's developing a quality product, speaking with customers, improving business processes, hiring, etc will affect your success much more than whether the country's economy is going down the tubes.. You have no control over it, so stop worrying about it. Worry about getting customers. Worry about developing.

Re: Winter is coming

#23

Post by trevelyan »

Winter is icummen in,

Lhude sing Goddamm.

VCs stop and angels drop,

Like aggregate demand....

Sing: Goddamm.

Downcast brow and skittish DOW

Show profit on the lam

Suster shivers, Techcrunch quivers

Damn you, sing: Goddamm.

Goddamm, Goddamm, (and Groupon's canned), Goddamm,

Watch Pincus do facepalm.

Sing goddamm, damm, sing Goddamm.

Sing goddamm, sing goddamm, DAMM.

Re: Winter is coming

#25

Post by jeffreymcmanus »

chailatte wrote: post #15
jeffreymcmanus wrote: post #12

Earlier quoted context omitted.

It doesn't follow that just because the stock market dips that funding for startups will suddenly evaporate. Most venture funds are investing money that was raised from limited partners years ago. And at any rate, most VCs go on vacation during August, so if you don't close your round by August 2, all bets are off...until September 1. This happens every year . A good counterpoint to this sky-is-falling is Dave McClur…

"And at any rate, most VCs go on vacation during August, so if you don't close your round by August 2, all bets are off...until September 1. This happens every year." I am not sure why you feel there's a need to make an unrelated assumption when, if you actually read the well-written techcrunch article, there's a reason why Mark said that - it's related to funding certainty and economics.

"funding certainty" is a contradiction in terms

Re: Winter is coming

#27

Post by fosk »

6ren wrote: post #20

Note: pizzas boom in recessions, substituting for expensive dining.

This is true, it's not recession for everyone and there are great opportunities in winter as well. If you make a compelling product that gets traction, there's no reason to not get some money. It's more challenging, but I mean it's ok, it's part of the game.

Re: Winter is coming

#28

Post by chailatte »

jeffreymcmanus wrote: post #25
chailatte wrote: post #15

Earlier quoted context omitted.

"And at any rate, most VCs go on vacation during August, so if you don't close your round by August 2, all bets are off...until September 1. This happens every year." I am not sure why you feel there's a need to make an unrelated assumption when, if you actually read the well-written techcrunch article, there's a reason why Mark said that - it's related to funding certainty and economics.

"funding certainty" is a contradiction in terms

Stop nitpicking. Did you run out of things to do at your startup?

Re: Winter is coming

#29

Post by TomOfTTB »

Symmetry wrote: post #21
TomOfTTB wrote: post #9

I don't agree with much of this for two reasons... 1. The bubble for already funded companies burst in the 90s but that didn't dry up funding. The truth is a wealthy person's best bet in a down economy is a small startup. Because the potential upside is so much better than any other investment. A company like Y Combinator can literally fund hundreds of startups and as long as at least one has a significant payday at…

No idea why people downvoted you... It usually doesn't make sense for a startup to borrow a significant amount of money in a currency whose value is dropping. I disagree with this though. Depreciating currency is awesome if you've got debt financing, because all of the value of your debt drops, but you only lose the value of the money you haven't spent yet. OTOH, it might be bad because uncertainty about depreciation…

I agree in the sense of having an asset and paying it back but I was thinking of it in terms of budgeting and getting through the year (or however long)

For example, say you budget for a year of operation and assume you need $1.5 million and get funded at that. Then the value of the currency falls. This means your revenue falls and the value of your cash on hand falls. Suddenly you're out of money and its hard to go back for another round so soon after the first.

That's where I see the problem. If you can survive long enough to pay the debt back in full a down currency works for you but it could be the death of you.

Re: Winter is coming

#30

Post by atsaloli »

timmyd wrote: post #18

Its funny that in 2008 - we see posts like "RIP Good Times" - http://techcrunch.com/2009/10/06/r-i-p-good-times-one-year-l... - and yet nothing - fundamentally - came of it. I'm sure Sequoia's companies left that meeting - scared, sacked a bunch of employee's, cleaned out the closest - and the VC's were happy because the capital lasted longer ensuring no more dilutions for themselves and a "trimmer" business even if…

FYI http://www.debtclock.com.au/ shows Australia with $68 billion in debt and rising. That's much better than the US, not in the black, either.

Given Australia's much smaller population, this works out to $7,889 per capita.

Compare to USA $46,780 per capita.

Country's headed in the wrong direction, mate. Same direction as the USA, I'm afraid.

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