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> However, I'm not at all concerned about the stock market. That has never influenced my decision to fund a company. You may be the exceptional person who has

by CPLX 11y ago

> However, I'm not at all concerned about the stock market. That has never influenced my decision to fund a company. You may be the exceptional person who has no assets whatsoever tied up in the stock market, but nearly every investor who has the resources to be an angel will have money in the market. When the market falls they have less money. They use money to invest in things. The correlation between the market and seed stage investing should be fairly direct and clear.

criddell 11y ago
> The correlation between the market and seed stage investing should be fairly direct and clear. The money can only be in one place at a time though. If you pull money out of publicly traded stocks, wouldn't that mean you have more money for angel activities? Although, when the market is way down, that's a great buying opportunity, so is that when angel investors stop putting money into startups and instead go on a stock buying spree?
- CPLX 11y ago
  You're arguing that they are substitute assets for each other that might move reciprocally, like stocks and bonds are. But equity at seed stage and public stage are the same asset class at different levels and move more in tandem. My argument was more about the wealth effect though, which is that a crash in stocks makes Angels poorer and thus less likely to invest in risky startups.
frandroid 11y ago
It depends if the investor pulls their money out of the market when things start to shake down, or if they have some insights that would push them to do so ahead of a downturn. If they do, they might have _more_ money than usual to invest during a market downturn. Also, as a VC, your money is in a variety of startups that can crest even when the rest of the market goes sideways. Shopify had its IPO this year, others have been bought by the big guys, so their investors are now flush with new money. I mean if we have another big recession, there's going to be an investment chill so even an investor with cash to spare will have trouble finding partners to invest with. But we're not there yet.

by CPLX 11y ago

criddell 11y ago

> The correlation between the market and seed stage investing should be fairly direct and clear. The money can only be in one place at a time though. If you pull money out of publicly traded stocks, wouldn't that mean you have more money for angel activities? Although, when the market is way down, that's a great buying opportunity, so is that when angel investors stop putting money into startups and instead go on a stock buying spree?

CPLX 11y ago
You're arguing that they are substitute assets for each other that might move reciprocally, like stocks and bonds are. But equity at seed stage and public stage are the same asset class at different levels and move more in tandem. My argument was more about the wealth effect though, which is that a crash in stocks makes Angels poorer and thus less likely to invest in risky startups.

frandroid 11y ago

It depends if the investor pulls their money out of the market when things start to shake down, or if they have some insights that would push them to do so ahead of a downturn. If they do, they might have _more_ money than usual to invest during a market downturn. Also, as a VC, your money is in a variety of startups that can crest even when the rest of the market goes sideways. Shopify had its IPO this year, others have been bought by the big guys, so their investors are now flush with new money. I mean if we have another big recession, there's going to be an investment chill so even an investor with cash to spare will have trouble finding partners to invest with. But we're not there yet.