31–40 of 52 posts
This is bad news for bootstrapped startups. If cash stops being a cocaine-tier obsession for these guys, we might have to compete with them. Sad.
Conventional reasoning is that decreased VC investments is actually good news for bootstrappers, as it winnows down the competition of people offering unsustainable unit prices with outsized markets. If everyone is forced to seek fast profitability, bootstrappers are the most experienced at it.
Money that comes easily, goes easily. Where did the VCs get the money from [1][2]? If they didn't break a sweat, they won't hesitate to throw it around without asking questions about profitability. EDIT: People who are downvoting are trying to hide the truth of the market, whether it's a bubble or not, this is the source of the money and in turn, your livelihood ;) [1] Probably from banks who got it from the gov't wh…
VC funds getting money from banks? I've not heard of that and your link doesn't support it. Unless the government connection you're trying to assert is that low interest rates drove more money into VC funds in order to seek higher returns.
This is a constantly overlooked factor in what's been driving the VC climate for the past few years. "Cheap" money (in the form of low interest rates) pushes more money into riskier positions, and the VCs have to give that money to someone. It's no coincidence that the correction is coming at the same time as interest rates finally rising again.
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Yup, same as it ever was. I remember back in 2001 saying to myself, "Good, all the bullshit is flushed out. Anything that survives this is real and should be invested in." Too bad I didnt put a few thousand into YHOO and AMZN back then: http://finance.yahoo.com/q/hp?s=AMZN&a=04&b=16&c=1997&d=04&e...
AMZN and GOOG would have been great investments and still are
Earlier quoted context omitted.
VC funds getting money from banks? I've not heard of that and your link doesn't support it. Unless the government connection you're trying to assert is that low interest rates drove more money into VC funds in order to seek higher returns.
> Unless the government connection you're trying to assert is that low interest rates drove more money into VC funds in order to seek higher returns. This is a constantly overlooked factor in what's been driving the VC climate for the past few years. "Cheap" money (in the form of low interest rates) pushes more money into riskier positions, and the VCs have to give that money to someone. It's no coincidence that the…
Earlier quoted context omitted.
This is great news for bootstrapped companies which are likely used to running lean, might actually be profitable, and can outrun and outlast an inflated competitor. Major cashflow changes tend to be disastrous for most companies, it's just not that easy to realign everything. If you're up against a competitor that has raised a lot easy money and now needs to show results, you should be happy to see this.
Perhaps. Or you can be stuck competing with a company that is pissing money into a hole and offering what appears to be a similar product for free. How are they ever going to become a functioning business w/ revenue > expenses? Underwear gnomes! Been there, done that, it sucked.
This is bad news for bootstrapped startups. If cash stops being a cocaine-tier obsession for these guys, we might have to compete with them. Sad.
Earlier quoted context omitted.
> Unless the government connection you're trying to assert is that low interest rates drove more money into VC funds in order to seek higher returns. This is a constantly overlooked factor in what's been driving the VC climate for the past few years. "Cheap" money (in the form of low interest rates) pushes more money into riskier positions, and the VCs have to give that money to someone. It's no coincidence that the…
I get the theory there but it's never seemed realistic to me. What VC would actually change their mind about pulling the trigger on an equity by because of a fractional point change in the risk free rate? It just doesn't make sense.
Plus, are you accounting for tax benefits and other ancillary forces?
Earlier quoted context omitted.
> Unless the government connection you're trying to assert is that low interest rates drove more money into VC funds in order to seek higher returns. This is a constantly overlooked factor in what's been driving the VC climate for the past few years. "Cheap" money (in the form of low interest rates) pushes more money into riskier positions, and the VCs have to give that money to someone. It's no coincidence that the…
I get the theory there but it's never seemed realistic to me. What VC would actually change their mind about pulling the trigger on an equity by because of a fractional point change in the risk free rate? It just doesn't make sense.
Good VCs usually maintain the same investing standards in good times and bad. But during boom times, there are more VCs, and many of the newcomers aren't particularly good at it.
This is generally a good sign for the market. Not so good for bloated startups without a viable business model or cash positive finances (including probably the majority of the unicorns out there at the moment). For such firms it's about to be a bloodbath, but hard facts are that there's a lot of junk out there that got funded in loftier times and now needs to be flushed out of the system. For lean startups with a st…
Earlier quoted context omitted.
I get the theory there but it's never seemed realistic to me. What VC would actually change their mind about pulling the trigger on an equity by because of a fractional point change in the risk free rate? It just doesn't make sense.
Are you saying that a change in interest rates doesn't have an effect on funding decisions? Because it seems like fractional interest rate changes would have (at least) a fractional effect on risk perception. Plus, are you accounting for tax benefits and other ancillary forces?