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SA is saying that cheap money is still available to tech cos., hence there couldn't be a bubble? (Please correct me if I'm wrong.) It sounds a little like circ

• hacknat 11y ago
  He's not saying that. He's saying it seems like the only type of tech company that is being penetrated, for the worse, by cheap money is late stage unicorns. His argument about the way cheap money is penetrating them is that the terms of the money look a lot more like loans than equity, hence, traditional valuations don't apply. For example Uber may have just received $100 million at a $10 billion valuation, but if the equity has a 3x cap, then how do you actually value the company from the equity just purchased? The answer is you can't, because traditional equity didn't change hands. VCs are dressing loans up as equity purchases. People are assuming that unicorns have to hit certain valuations in order for the VCs investments to not be repaid or scrapped. SA is challenging this assumption, though acknowledging that the situation isn't ideal and highlighting that it doesn't necessitate a bubble.