YC offers 20k+ for a few percent. Startup Chile is 40k with a co-investment of around 10k. That money is supposed to support the founders for a few months while they get the prototype out the door and build traction. In comparison, 750k is a metric ton of cash, and should be enough to support a founding team for several years. Not judging, but if you're positioning it as a seed round instead of Series A that may be p…
BTW, YC now invests $120k in most of their companies: http://blog.ycombinator.com/the-new-deal
Wow. I didn't know they'd dropped the convertible round. The new arrangement is a great deal -- more than a $1.7 million valuation for each company accepted.
Except: "Bear in mind that the total dollar amount of money flowing into seed deals barely declined". That is a questionable definition of "popping" a bubble. The article does go on to admit that it's just selectively illustrating the number of deals, not the amount invested in seed deals, which is actually still the same in aggregate, and then wishy-washily says it's up to you to interpret this yourself etc. But sin…
And it's equally possible to interpret this data positively. Perhaps VCs are becoming more selective and concentrating their money on better teams/ideas instead of casting as wide of a net as possible(I am not saying this is actually the case).
I don't understand why so many journalists try to find catastrophe in the absence of contrary evidence.
Except: "Bear in mind that the total dollar amount of money flowing into seed deals barely declined". That is a questionable definition of "popping" a bubble. The article does go on to admit that it's just selectively illustrating the number of deals, not the amount invested in seed deals, which is actually still the same in aggregate, and then wishy-washily says it's up to you to interpret this yourself etc. But sin…
First of all. The word click-bait needs to die. It implies wrongdoing by the author, but all you are really saying is the headline grabbed your attention and you didn't like the content. Second, the aggregate chart shows the total amount invested went from 9 years of growth to it's first decline. Look at Q3 2014 vs Q3 2013 more than a 50% decline in seed deals! With numbers like that it's hard not to interpret it as…
Nope. It shows the total number of deals, not amount invested. You fell victim to precisely the problem I mentioned.
Except: "Bear in mind that the total dollar amount of money flowing into seed deals barely declined". That is a questionable definition of "popping" a bubble. The article does go on to admit that it's just selectively illustrating the number of deals, not the amount invested in seed deals, which is actually still the same in aggregate, and then wishy-washily says it's up to you to interpret this yourself etc. But sin…
And it's equally possible to interpret this data positively. Perhaps VCs are becoming more selective and concentrating their money on better teams/ideas instead of casting as wide of a net as possible(I am not saying this is actually the case). I don't understand why so many journalists try to find catastrophe in the absence of contrary evidence.
That's negative for shitty teams/ideas, but yeah, probably positive for the health of the ecosystem.
I would apply the "San Francisco Rent Test". Are SF rents still high? Then Seed Bubble: not popped.
Except: "Bear in mind that the total dollar amount of money flowing into seed deals barely declined". That is a questionable definition of "popping" a bubble. The article does go on to admit that it's just selectively illustrating the number of deals, not the amount invested in seed deals, which is actually still the same in aggregate, and then wishy-washily says it's up to you to interpret this yourself etc. But sin…
That should actually be a red flag about the data. When you see a rapid, precipitous decline in deals but amounts don't change, you have to look at the data. How do you get a rapid, precipitous decline in deals without an expected decrease in dollars? Use a data source that a) is liable to miss deals[1] and b) will classify multi-million dollar rounds involving institutional/venture investors as "seed"[2][3]. [1] Per…
Could an article based on the same data not also be titled "Seed rounds increasingly replaced by Series A"? Because while Seed rounds are in decline, Series A is up.
Series A also are higher amounts than Seed, so volume in investments is actually going up.
Also, it doesn't matter if something is called Series A or Seed. In the end it is about the amount of dollars available to entrepreneurs.
Interesting graph. The "bubble" goes parabolic right in 2009, as the financial system is awash in QE money, searching for yield. Almost textbook.
QE has nothing to do with VC
>QE has nothing to do with VC
Sure it does. Easy money is easy money. That goes for you and your mortgage at historically low rates, or VCs raising capital. When stimulus is occurring, it's interesting to see where it ends up.
I'm not implying anything nefarious. In fact, I'd say it's working as intended (or at least expected).
Did I see the same chart you did? I went back and looked, all I saw was "Q1" and "Q3" labels while the data showed all four quarters, but only half were labelled. It /was/ missing a Q4 though at the end.
Creator of the graphs and author of the original post (here: https://medium.com/mattermark-daily/why-is-the-number-of-see... ) All the quarters from Q1 2005 through Q4 2014 were plotted. The axis labels do not show all of them due to space constraints. Apologies that this was confusing, I will make sure to add all the tick marks and labels in the future.
I don't think you need all, I mean, there were space constraints. This is why a bar graph can be clearer than a line graph for discrete data though. They may be boring, but they are often effective at communication. :-) Oh and it's helpful to label both ends of the graph, from Q1 2005 to Q4 2014, then fill in what labels you can in the middle. If you'd picked random Qs or even just every year, perhaps to shade the backgrounds of each year, that might have made for a more understandable graph. Our fault for misunderstanding it in the first place, of course... This is also why some places link to tables of data used in the graph. You could click to view the table if you had any questions about what you're seeing in the graph. Stephen Few's an accessible read on this subject.
Creator of the graphs and author of the original post (here: https://medium.com/mattermark-daily/why-is-the-number-of-see... ) All the quarters from Q1 2005 through Q4 2014 were plotted. The axis labels do not show all of them due to space constraints. Apologies that this was confusing, I will make sure to add all the tick marks and labels in the future.
I don't think you need all, I mean, there were space constraints. This is why a bar graph can be clearer than a line graph for discrete data though. They may be boring, but they are often effective at communication. :-) Oh and it's helpful to label both ends of the graph, from Q1 2005 to Q4 2014, then fill in what labels you can in the middle. If you'd picked random Qs or even just every year, perhaps to shade the ba…
Cool, this is great feedback. I'll check out Stephen Few's work too -- thanks for reading and caring!
When demand increases for Apples, the price of Apples increases. When the price of Apples increases, the demand for Oranges increases. Fed demand for Investment Bonds increases the price of Investment Bonds. When the price of Investment Bonds increases, the demand for other investments increases. Textbook Econ 101, as the parent comment noted.
I would say you're comparing apples to oranges by conflating Investment Bonds (which I'm assuming you mean Treasury Bonds), but you've already set yourself up for the apples and oranges with your example.
If you'll check the source article[0] that the Techcrunch graph was pulled from, you'll see that there is a negative correlation between the Treasury bond yield and the amount of money flowing into seed deals.
According to your Textbook Econ 101, there should be a positive correlation between these two. But the data shows there is not.