What Does the Post Crash VC Market Look Like? • Hacker News Board

Re: What Does the Post Crash VC Market Look Like?

#61

Post by hef19898 » Thu, Sep 22, 2022, 7:36 AM UTC

devoutsalsa wrote: post #39

Apocryphon wrote: post #27

Earlier quoted context omitted.

Margin Call takes place in 2008, but its depiction of how the investors respond to a crisis is evergreen.

I love that movie. It’s my favorite financial drama. I have sympathy & contempt for nearly everyone in that movie.

Honestly, those traders kept around until the dirty work was done got the best deal. Million dollar bonus for a couple of days of work and a clear way out, I would have taken that deal in a second.

Side note: Regardless of the borderline sociopathic ruthlessbes of Jeremy Irons character, I'd propably work for him as well. At least for a while. Heck, he was flown to a crisis meeting, listened to the people on the ground, understood the problem, met a decision and implemented a plan. All that in one night! Most senior managers I know would have needed a month to understand the why the underlying mathematical model had any significance.

Re: What Does the Post Crash VC Market Look Like?

#62

Post by disgruntledphd2 » Thu, Sep 22, 2022, 7:41 AM UTC

fny wrote: post #46

djbusby wrote: post #33

Earlier quoted context omitted.

Can you two (@azlyrics, @fny) expand on this - or point to a topical article? When I first saw this @azlyrics comment was dead and I'm wondering what the fuzz is.

Citrix was struggling to borrow $4Bn for a leveraged buyout, they issued bonds that effectively yield 10% annually. That's a massive return we haven't seen forever in fixed income.

Yeah and basically nobody wanted it, which implies that things are gonna get worse.

Re: What Does the Post Crash VC Market Look Like?

#63

Post by csomar » Thu, Sep 22, 2022, 8:26 AM UTC

time_to_smile wrote: post #10

"Post" crash? If you think what we've seen is the crash you have no idea what's coming.

People dreaming on a crash either haven't seen inflation before, or are hoping their US dollars will regain some value.

Not happening. The current rate raises are done to control inflation, and not to reverse it. Some prices will stay that high because of inflation. Some prices have already went down but you can't see it: also because of inflation.

Sorry, but the Fed had already robbed you, and you are unlikely to get your money back.

Re: What Does the Post Crash VC Market Look Like?

#64

Post by KptMarchewa » Thu, Sep 22, 2022, 9:30 AM UTC

spaceman_2020 wrote: post #50

CSMastermind wrote: post #40

Earlier quoted context omitted.

I'd argue that crypto fits that bill more than VC.

Crypto has a lot of retail suckers and speculators to pump and dump on, unlike private markets.

2017 crash yeah. Now way more institutional money is involved - tens of billions of dollars. https://cointelegraph.com/news/vcs-pour-14-2b-into-crypto-in...

Re: What Does the Post Crash VC Market Look Like?

#65

Post by friendzis » Thu, Sep 22, 2022, 9:46 AM UTC

lawn wrote: post #59

enos_feedler wrote: post #57

Earlier quoted context omitted.

This seems logical but I always think if it was that obvious it would already happen. We don't even know if there is ONE good idea with crypto yet, but there are whole funds and firms dedicated to chasing the plethora of crypto businesses.

Well, the one good idea is using it as money. Although the adoption didn't really happen, and its difficult to earn money from crypto being used as money, so people are desperately searching for other things to do with it.

> Well, the one good idea is using it as money

The major component of crypto being distributed consensus it has absolutely no way to work with external world, therefore it can only work with blockchain-borne stuff. The only thing dreamed up yet are cryptotokens.

Since blockchains have no way to interact with external world it can only be used to exchange cryptotokens between wallets - there is no way to ensure that other side of the transaction involving anything else but cryptotokens is upheld. So it CANNOT be used as money by probably any sane definition of money.

Crypto scams are natural consequence of this inherent property.

Re: What Does the Post Crash VC Market Look Like?

#66

Post by waldothedog » Thu, Sep 22, 2022, 9:55 AM UTC

djbusby wrote: post #34

vsareto wrote: post #21

Earlier quoted context omitted.

The saying might just be an observation, but I'm not sure what else people should be saying about VC. VC matches people-with-ideas to money. Have they ever advertised being anything else (while sober)?

My VC friends use the words Talent when sober but keep repeating (mumbling) Traction and Execution after a few pints. Vino Veritas?

I like the combination of ‘pints’ and ‘vino’ here

Re: What Does the Post Crash VC Market Look Like?

#67

Post by snake_doc » Thu, Sep 22, 2022, 10:21 AM UTC

azlyrics wrote: post #25

datalopers wrote: post #9

Earlier quoted context omitted.

Broad markets will crash and LPs will ask for capital back. The overhang will drop without requiring investment.

checkout the citrix bond situation. unable to raise targeted goal through issuing corporate yields. its really scary we are seeing corporate bond yields spiking and liquidity drying up. if a legitimate large corporation is having trouble raising money, its a huge red flag.

It’s definitely a buyout specific problem; deals that were inked before the Fed’s rate increases have pretty unattractive terms compared to the current market conditions. There’s a supply glut of buyout debt at those terms, underwriting banks are the ones holding the bag.

Re: What Does the Post Crash VC Market Look Like?

#68

Post by fuzzfactor » Thu, Sep 22, 2022, 10:53 AM UTC

seibelj wrote: post #4

So many people working in VC went straight into it after Stanford without ever starting a company, like it’s investment banking or something. Maybe the VC industry will shrink along with the startups, or at least the unhelpful partners.

Things may trend back to normal and invest more in people who already know how to profit from their activities in addition to having a promising dream.

The difference in risk is orders of magnitude.

These investments can not have terms that are as one-sided as some have specialized in, plus it becomes less realistic for an entrepreneur who can properly leverage $10 million to be served by capitalists who have to borrow $10 million to do it.

The truly success-bound entrepreneur will have a much less limited upside by leveraging the $10 million from someone who is actually worth lots more than $10 million instead.

I expect the herd will be thinned considerably.

Kind of like the difference between somebody visiting Miami, renting a Lamborghini which is almost out-of-their reach, then being seen having their car parked at South Beach by a valet. As compared to a well-retired resident owning half-a-dozen European performance cars in their garage. They only drive one at at time anyway, just like everybody else.

Wasn't it Buffet that said when the tide goes out real quick you see who wasn't wearing anything covering their bottom?

Re: What Does the Post Crash VC Market Look Like?

#69

Post by junofan » Thu, Sep 22, 2022, 11:03 AM UTC

lawn wrote: post #59

enos_feedler wrote: post #57

Earlier quoted context omitted.

This seems logical but I always think if it was that obvious it would already happen. We don't even know if there is ONE good idea with crypto yet, but there are whole funds and firms dedicated to chasing the plethora of crypto businesses.

Well, the one good idea is using it as money. Although the adoption didn't really happen, and its difficult to earn money from crypto being used as money, so people are desperately searching for other things to do with it.

Where’s capital formation headed? Dunno how durable institutional trust will be in the current regimes. Some questionable decisionmaking.

Re: What Does the Post Crash VC Market Look Like?

#70

Post by dmurray » Thu, Sep 22, 2022, 11:30 AM UTC

Kiro wrote: post #55

fny wrote: post #46

Earlier quoted context omitted.

Citrix was struggling to borrow $4Bn for a leveraged buyout, they issued bonds that effectively yield 10% annually. That's a massive return we haven't seen forever in fixed income.

How do I buy it?

If you have to ask, probably the better approach is to buy a junk bond ETF like any of the ones on [0]. This will give you a more diversified portfolio than just betting on Citrix.

[0] https://www.thebalancemoney.com/list-of-junk-bond-etfs-12147...