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Next up (and the harder problem imo) is for companies to feel like they have enough leverage vs investors (mainly institutional VC) that they can be "nonstandar
by hkmurakami 11y ago
Next up (and the harder problem imo) is for companies to feel like they have enough leverage vs investors (mainly institutional VC) that they can be "nonstandard" in their option contracts (particularly during seed and A rounds). It's no coincidence that the companies that have taken the lead on this front are the startup darlings and/or repeat founders who have considerable leverage against funders (including YC companies, since their cred boost makes being nonstandard much easier than those without the brand).
We've made huge progress in that direction over the last 5 years as ZIRP made money cheap (and since the main leverage investors have against companies is the scarcity of funding, their leverage has decreased dramatically since the 80's). But as the funding mania crescendo of 2015 has passed, ZIRP is being wound down, and as private and public market valuations of small young tech companies plummet, I am not sure if that trend will continue into the future.
If there is one cohort that can band together to change the status quo, right now, that would be the YC companies. I am hopeful that enough momentum can be built over the next small handful of years by these companies so that "what is normal" can change permanently.
- bretpiatt 11y agoI understand the Fed moved the overnight rate up to 25 basis points. It isn't going to last. Rates are going to stay low for the foreseeable future for a laundry list of macro economic reasons -- the easiest to cover is the USA cannot afford to raise rates as it will increase the global consolidation of capital in the US causing severe issues for EU and AP regional (bond primarily) markets. The yield of the 10 year Treasury should show that money is still flooding in and it is still hard to find quality returns: https://ycharts.com/indicators/10_year_treasury_rate https://ycharts.com/indicators/10_year_treasury_rate