4 ms·

All of it is because investment in Q4 of last year was lower than any Q after 2012. Which is a ridicules reason given that Q3 was by far the highest ever. Wit

by mbdev 11y ago

All of it is because investment in Q4 of last year was lower than any Q after 2012. Which is a ridicules reason given that Q3 was by far the highest ever. With that being said given the state of the public market (going down + low dividends) startups will still look sexy for a long time. I wouldn't worry about it.

mark242 11y ago
"With that being said given the state of the public market (going down + low dividends) startups will still look sexy for a long time. I wouldn't worry about it." This is such a ridiculous comment that it needs to be highlighted for just how myopic it really is. Angel-and-after VC investment has been driven, increasingly, by the effects of ZIRP. "Fuck it, we don't have anywhere else to put our money, we might as well gamble on 23 red" is basically the prime justification for a lot of money that's been put into, say, companies that deliver lunches in San Francisco. Now that we are moving away from ZIRP, sinking money into glorified AWS-React-Node applications is going to dry up, naturally. There are huge institutional investors who will no longer be willing to take the risk, period. The "state of the public market" is getting hammered by oil prices, and by China. I don't know how you read that as "startups will still look sexy". The roulette table looks sexy when the bank isn't giving your savings account any return. The moment it does, guess what happens.
- alextgordon 11y ago
  I agree 100% with your analysis long-term, however it seems unlikely that interest rates will rise for the foreseeable future.
  - w4 11y ago
    > it seems unlikely that interest rates will rise for the foreseeable future Based on the past two weeks of the stock market? I'm not so sure. A choppy stock market may certainly slow down the Fed's plans for 2016, but Yellen seems hellbent on getting away from ZIRP (and the aforementioned weirdness it creates, like pension funds investing heavily in CRUD apps) before the end of this business cycle. If she doesn't, she's reliant on Congress to prop up the economy whenever it inevitably enters a recession, and given Congress's recent track record I doubt that's a gamble she wants to take.
- tormeh 11y ago
  Meanwhile, the stock market has been giving returns of 20% per year for the last couple of years. It's been crazy. And corporate bonds typically yield 5%. Savers don't need to care about what the interest rate is. The people who care are the people who lend to invest, for whom low interest rates means increasingly risky stuff is profitable.

by mbdev 11y ago

mark242 11y ago

"With that being said given the state of the public market (going down + low dividends) startups will still look sexy for a long time. I wouldn't worry about it." This is such a ridiculous comment that it needs to be highlighted for just how myopic it really is. Angel-and-after VC investment has been driven, increasingly, by the effects of ZIRP. "Fuck it, we don't have anywhere else to put our money, we might as well gamble on 23 red" is basically the prime justification for a lot of money that's been put into, say, companies that deliver lunches in San Francisco. Now that we are moving away from ZIRP, sinking money into glorified AWS-React-Node applications is going to dry up, naturally. There are huge institutional investors who will no longer be willing to take the risk, period. The "state of the public market" is getting hammered by oil prices, and by China. I don't know how you read that as "startups will still look sexy". The roulette table looks sexy when the bank isn't giving your savings account any return. The moment it does, guess what happens.

alextgordon 11y ago
I agree 100% with your analysis long-term, however it seems unlikely that interest rates will rise for the foreseeable future.
- w4 11y ago
  > it seems unlikely that interest rates will rise for the foreseeable future Based on the past two weeks of the stock market? I'm not so sure. A choppy stock market may certainly slow down the Fed's plans for 2016, but Yellen seems hellbent on getting away from ZIRP (and the aforementioned weirdness it creates, like pension funds investing heavily in CRUD apps) before the end of this business cycle. If she doesn't, she's reliant on Congress to prop up the economy whenever it inevitably enters a recession, and given Congress's recent track record I doubt that's a gamble she wants to take.
tormeh 11y ago
Meanwhile, the stock market has been giving returns of 20% per year for the last couple of years. It's been crazy. And corporate bonds typically yield 5%. Savers don't need to care about what the interest rate is. The people who care are the people who lend to invest, for whom low interest rates means increasingly risky stuff is profitable.