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U.S. Tech Funding – What’s Going On?

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Re: U.S. Tech Funding – What’s Going On?

#111
post #3

"And the tech IPO is basically dead. The tech IPO market is at early 1980's volumes. For most of the 90's the majority of tech funding was public. This has reversed. It used to be routine to hit $20 million in revenues and go public. Not anymore." It's interesting how it seems that inequality is an unintended consequence of Sarbanes-Oxley. Before an engineer might vest after four or five years, just as the company is…

I would argue the point of Sarbox was to squish the IPO market. Not an unintended consequence at all.

It was done with the bigger picture of restoring retail confidence in the market. That could only be achieved by damping the oscillations.

I agree it's been a bad thing. What is odd to me is that I exepcted IPO activity to take off in a different jurisdiction, like London or Toronot or somewhere. That hasn't happened really. Instead it's just a case of some companies getting picked off by bigger ones, a couple of big home runs, and the rest sputtering along making a but if money but soaking up investors time and patience.

Re: U.S. Tech Funding – What’s Going On?

#112
post #83

Earlier quoted context omitted.

>The reason money gets drawn away from "the average person" and collects in "billionaires and large companies" is because the average person values money for what it can do for them, while billionaires and large companies value money as a scorecard. That's the reason that people buy things from people who sell things, not the reason for the unequal distribution of wealth. There is no logical necessity in people's spe…

The reason for the accumulation of wealth is because most profitable markets (i.e. ones where profits are not competed away) involve owning an asset that others a.) value and b.) cannot easily replicate. Very often these days, that asset is simply the purchasing habits of a large number of consumers. Building machinery is easy, but changing peoples' minds is hard. The good news - from an economic mobility standpoint…

That seems like a non-sequitur. The existence of such assets does not entail massive wealth inequality. It obviously cannot, since such assets have always existed whereas wealth inequality has increased enormously. Purchasing habits are not really an asset, by the way, since a company does not own the purchasing habits of its customers.

Re: U.S. Tech Funding – What’s Going On?

#113
post #11
post #3

"And the tech IPO is basically dead. The tech IPO market is at early 1980's volumes. For most of the 90's the majority of tech funding was public. This has reversed. It used to be routine to hit $20 million in revenues and go public. Not anymore." It's interesting how it seems that inequality is an unintended consequence of Sarbanes-Oxley. Before an engineer might vest after four or five years, just as the company is…

I see it as the cost of forming a startup is much lower now so they can stay private longer. Combined with VC companies and angel investors flush with money, they are keeping the companies private longer to capture more of the gains. Then there are established companies who want to stay relevant who throw money at startups with no profit in sight but cool technologies. My guess is that in the end, problems will come…

> My guess is that in the end, problems will come when the established companies slow down in acquisitions and the VC companies and angel investors get tired of startups which can't show profit.

I think it's exactly this as well. The way I see it (and I'm a financial idiot so I'm probably totally off), the bubble pop won't be when "the stock market" decides the companies aren't valuable anymore, rather the game is up when the Big Corps (Google/FB/Microsoft/etc) stop buying.

Re: U.S. Tech Funding – What’s Going On?

#114
post #33

Earlier quoted context omitted.

This is basically what Capital in the 21st Century said too. People who reinvest money they make into making more money are getting richer. Those who spend it are not. Pretty straight forward.

Except that unless you are lucky, you're unlikely to become wealthy from just saving/investing ordinary income. You're both presenting it as if it were a simple choice between being frugal and engaging in consumption, but it's not.

Actually, it really is that simple.

Save 50% of you income for ten years and invest it sanely and you will become rich. It's a pretty simple mathematical equation.

Most people don't want to admit that it works because they can't defer their consumption for a decade.

Re: U.S. Tech Funding – What’s Going On?

#115
post #86

Earlier quoted context omitted.

The average retail investor is still licking their wounds from 2008. Many, like myself, put our tiny blood soaked wads in CD's, at .01 percent. There are millions of Americans who can't gamble on a rigged stock market, and relied on a healthy 5% interest rate. This free money being doled out by the Fed to a select few entities will have consequences. My biggest fear is market will finally win over retail investors fr…

The average retail investor is doing just fine. Anyone who did something as basic as hold an S&P 500 ETF is up quite a bit from the crash.

Well, yes. But that dies to fit the narrative of markets bad! Capitalism bad!

Re: U.S. Tech Funding – What’s Going On?

#116
post #114

Earlier quoted context omitted.

Except that unless you are lucky, you're unlikely to become wealthy from just saving/investing ordinary income. You're both presenting it as if it were a simple choice between being frugal and engaging in consumption, but it's not.

Actually, it really is that simple. Save 50% of you income for ten years and invest it sanely and you will become rich. It's a pretty simple mathematical equation. Most people don't want to admit that it works because they can't defer their consumption for a decade.

Hardly anyone makes more than $2M in ten years. Investing $1M conservatively and moving to the third world might get you a reasonable standard of living, but that's not what people mean when they say rich.

Re: U.S. Tech Funding – What’s Going On?

#117
post #3

"And the tech IPO is basically dead. The tech IPO market is at early 1980's volumes. For most of the 90's the majority of tech funding was public. This has reversed. It used to be routine to hit $20 million in revenues and go public. Not anymore." It's interesting how it seems that inequality is an unintended consequence of Sarbanes-Oxley. Before an engineer might vest after four or five years, just as the company is…

"It's interesting how it seems that inequality is an unintended consequence of Sarbanes-Oxley."

No, it's a consequence of low interest rates. "Private equity" is mostly borrowed money. Think "leveraged buyout", not "all-cash deal". Here's a list of the top 10 private equity lenders for 2011.[1] #1 is Bank of America.

Back in 2000, 1-year Treasury bills were paying around 5.11%. Today they're around 0.26%. Debt financing looks much more attractive with today's low, low rates.

[1] https://www.preqin.com/blog/101/4683/top-10-pe-debt-financer...

Re: U.S. Tech Funding – What’s Going On?

#118
post #89

Earlier quoted context omitted.

> Especially if you are trying to do anything with significant technical challenges like with computer vision, deep learning, VR etc... My view is that those are not very promising "technical" directions, exploitations, or "challenges". My view: Take in data, manipulate it, put out results of the manipulations. Want the results to be valuable in some important sense. For that value, want more powerful manipulations.…

I can't really parse what you are stating. You don't think CV, ML/DL, VR are worth pursuing? Or are you saying that those are not "mathematically" technical? If the latter then you are decidedly wrong as proven by any number of research teams at MSFT/FB/GOOG etc... >Not really expensive. So applied math researchers aren't expensive? Tell that to every PhD Mathematician at Google/FB.

> Or are you saying that those are not "mathematically" technical?

Right. They are overwhelmingly merely heuristic. The methodology is to guess, with heuristics, and then try it and find out (TIFO method) on real data, maybe adjust, and use it when it appears to work. There's next to nothing in theorems and proofs before hand that show that the manipulations will be powerful or yield valuable results.

There is a long history of good applied math where, once the theorems are proved, there isn't a lot of doubt about how the real world application will go. E.g., (1) GPS, (2) the earlier version for the US Navy, (3) error correcting coding for, say, satellite data communications, (4) phased array passive sonar, (5) optimal allocation of anti-ballistic missiles to incoming warheads, .... There's much more making good applications of math, e.g., Wiener filtering, the Neyman-Pearson result in advanced radar target detection, in cases of engineering where, once the engineering is done, there's not a lot of doubt about how good the practical results will be. No guessing. No TIFO. Low risk. High payoff. E.g.,

http://iliketowastemytime.com/sites/default/files/sr71_black...

As designed, unrefueled range 2000+ miles, altitude 80,000+ feet, speed Mach 3+, never shot down. Just as planned. Just as clear from the engineering, based on quite a lot of applied math.

Uh, for (5), really don't want to have to use the TIFO method! Instead, want to know with high confidence before someone pushes a big red button.

> So applied math researchers aren't expensive?

For evaluating the cost of a startup, commonly pay the founder $0.00 per year until there is revenue or at least funding. :-)! Sorry 'bout that.

E.g., I worked in artificial intelligence at IBM's Watson lab. Part of the work was to monitor the health and wellness of server farms and their networks. No theorems. No real guarantees of the power of the data manipulations or the value of the results. I did an upchuck, derived some new math, and published it. The math says that we know in advance the false alarm rate. The AI work didn't. The usual approaches to machine learning don't do such things because they don't approach the work as assumptions, theorems, and proofs.

For Ph.D. applied mathematicians (I am one) at Google, once Google ran a lot of recruiting ads, and I sent them a resume and got a phone interview.

They asked what my favorite programming language was, and I said PL/I. Apparently the only acceptable answer was C++. It was clear enough that my answer of PL/I essentially ended the interview.

Why PL/I? It has some total sweetheart scope of names rules. The exceptional condition handling is super nice (get an implicit pop of the stack of dynamic descendancy with just the right clean up). The data structures are nearly as powerful as classes and much faster in execution. Threading (tasking) in the language. Pl/I does really nice things with automatic storage -- C doesn't. And there's more.

C++? We know the history: Unix was a baby Multics, on an 8 KB DEC box. C was a dirt simple language, no runtime. All function calls for every little thing, e.g., string manipulations -- the first version of PL/I was like that, but the later versions compiled such things and were much faster. PL/I does just wonderful things with arrays, but C doesn't really have arrays.

Then C++? That was, along with Ratfor, an example of Bell Labs liking pre-processors. So, C++ was a pre-processor to C. Instead, PL/I was carefully designed.

My selection of PL/I over C++ was not wrong.

Google laughed at my naming PL/I. The laugh is on Google. Uh, Linux is a version of Unix which was a baby version of Multics which was written in, may I have the envelope, please (drum roll), right, PL/I.

It was clear that my Ph.D. in applied math and experience were of no interest at all. None. Zip, zilch, zero. C++? Sure. Ph.D. in applied math? Nope -- worthless.

Okay. It was Google's decision. But, now I get to make a decision: I'm not impressed by the power of the role of math at Google. At QUALCOMM, maybe. At Renaissance Technologies, sure. At Google, nope.

I still prefer PL/I to C++. Sorry 'bout that! But I wouldn't want to use either language in production now.

Now I program on Windows, not Linux, and on Windows I use the .NET Framework. To do that, for a language, I have just two leading choices, C# or the .NET version of Visual Basic (VB). The difference is mostly just the flavor of syntactic sugar, and I prefer the more verbose flavor of VB.

For FB, I never applied -- it seemed totally hopeless.

I'm doing my own startup, right, based on some applied math I derived as in my post here.

A few weeks ago I got all the code running I first planned to do. Now that the code is running, I see a few tweaks. Then I will load some initial data -- have been having fun collecting some. Then on to alpha test, beta test, going live, getting publicity, users, ads, and revenue.

Hopefully people will like the results (from the math, although users will not be ware of anything mathematical); if so, then I stand to have a nice startup.

Much of my confidence in the work is the theorems and what they say about the power of the data manipulations and the resulting value of the results.

Re: U.S. Tech Funding – What’s Going On?

#119
post #88

Earlier quoted context omitted.

Yeah, but prediction markets are basically illegal, because---again---government regulation. Prediction markets are so vastly powerful, both as a financial tool (hedging) and an information tool, that people would be screaming bloody murder if we already had them and then they were taken away.

Prediction markets are being decentralized. They will be uncensorable. http://www.augur.net/

I hope so. I am a big fan of bitcoin and I see it as the way to do prediction markets.

The problem is, people won't be able to use it seriously (i.e. with non-trivial amounts of money), because once you convert your earnings into fiat money, it goes into a bank, so you have to pay taxes on it, and you can't put something illegal on your taxes (well, maybe you can, people say "the IRS doesn't care," and I'm no expert, but I doubt it).

Re: U.S. Tech Funding – What’s Going On?

#120
post #114

Earlier quoted context omitted.

Except that unless you are lucky, you're unlikely to become wealthy from just saving/investing ordinary income. You're both presenting it as if it were a simple choice between being frugal and engaging in consumption, but it's not.

Actually, it really is that simple. Save 50% of you income for ten years and invest it sanely and you will become rich. It's a pretty simple mathematical equation. Most people don't want to admit that it works because they can't defer their consumption for a decade.

This seems to contain a number of assumptions about income, non-discretionary living expenses, and rates of return. You'll certainly be richer but you're not likely to become rich (which I guess I should have defined earlier, but which I consider to be wealthy enough that you can retire and live off passive income should you so choose).
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