The number of seed rounds in 2014 fell compared to 2013 • Hacker News Board

Re: The number of seed rounds in 2014 fell compared to 2013

#71

Post by gee_totes » Sat, Jan 17, 2015, 10:55 PM UTC

hnnewguy wrote: post #66

gee_totes wrote: post #21

Earlier quoted context omitted.

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).

To make sure we're talking about the same thing; the pink line in the second graph on the techcrunch article is what you're talking about when "the bubble goes parabolic".

That pink line represents the number of seed deals completed, not the amount of money in the system.

Unfortunately, I cannot download the original dataset that Mattermark is using, but using a dataset from Pricewaterhouse Coopers[1], and data from FRED[2], I have run some statistical analysis using R.

My results are here: http://imgur.com/a/eFzs1

In short, the only statistical correlation I can find between QE and Seed capital is a negative one, which would contradict your original hypothesis.

[0]https://medium.com/mattermark-daily/why-is-the-number-of-see...

[1]http://www.pwcmoneytree.com/HistoricTrends/CustomQueryHistor...

[2]http://research.stlouisfed.org/fred2/graph/?id=MBST#

Re: The number of seed rounds in 2014 fell compared to 2013

#72

Post by jacquesm » Sun, Jan 18, 2015, 1:14 AM UTC

api wrote: post #70

jacquesm wrote: post #31

Earlier quoted context omitted.

Yes, absolutely.

In retrospect the second comparison is more like >>>>>>!!!!!!! Founder conflicts are death.

Not always, been there, done that. But they can definitely rob you of momentum when you need it most.

Re: The number of seed rounds in 2014 fell compared to 2013

#73

Post by hnnewguy » Mon, Jan 19, 2015, 2:18 PM UTC

gee_totes wrote: post #71

hnnewguy wrote: post #66

Earlier quoted context omitted.

> 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).

To make sure we're talking about the same thing; the pink line in the second graph on the techcrunch article is what you're talking about when "the bubble goes parabolic". That pink line represents the number of seed deals completed, not the amount of money in the system. Unfortunately, I cannot download the original dataset that Mattermark is using, but using a dataset from Pricewaterhouse Coopers[1], and data from…

>My results are here

Why would you compare quarterly values of seed money to a cumulative total (QE) and expect a correlation? They are completely different series. Try doing a running total for the seed money and the graph will look different. The first and third graphs don't make sense for this reason.

The second graph is better, and you can see there is some correlation. Did you test for lags, or do you assume that QE money would flow instantly into the coffers of institutional investors?

I applaud your effort, but there is more to this analysis than overlaying two graphs. You need to understand the data.

Re: The number of seed rounds in 2014 fell compared to 2013

#74

Post by applecore » Mon, Jan 19, 2015, 4:39 PM UTC

There's a significant time delay between when seed rounds are closed and when they're announced, so data for the most recent quarters are almost certainly incomplete. This leads to the spurious conclusion that the number of seed rounds declined in 2014.