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I'm only citing what I've read, so forgive me if I lack the necessary understanding here, but my general interpretation has been that: 1) Money is still super

I'm only citing what I've read, so forgive me if I lack the necessary understanding here, but my general interpretation has been that: 1) Money is still super cheap in the private equities, meaning companies that likely could IPO opt instead to stay private and take on more private cash to avoid public market scrutiny as they grow. 2) Because money is so cheap, it's easy for competition to pop up in any industry piquing venture interest. This is requiring companies to take losses to acquire customers. These fickle customers then have plenty of options to move to a competitor once the company tries to increase prices to hit positive margin. As an anecdote, I have absolutely no loyalty to most services I use these days. 3) This seems to create kind of a vicious cycle of VC-subsidized business operations, never allowing a large portion of these businesses to hit metrics that would appease the public, keeping most of them private, in friendly ecosystems in the short term.

Cacti 9y ago
Fundamentally, there is too much money (interest rates are too low, money is too cheap) chasing too few returns (too many startups are ultimately just bad business ideas). Remember when everyone was talking about a bubble in '14? It wasn't a bubble in the end-point of these startups, it was a bubble in their initial creation and funding, and this is the consequence of that bubble: decreased returns, illiquid assets, the end of the 3-year cycle time without the values that were expected. The biggest threat is your third point, as it makes the inevitable bust far more painful if you're able to paper over the long-term issues with short-term money. And the secondary threat is that there is no bust but this just continues on as a slow death, which slowly drains VCs of investment funds from other funds (pensions, etc.), which makes their money more expensive, which sucks out more money, repeat.

Cacti 9y ago

Fundamentally, there is too much money (interest rates are too low, money is too cheap) chasing too few returns (too many startups are ultimately just bad business ideas). Remember when everyone was talking about a bubble in '14? It wasn't a bubble in the end-point of these startups, it was a bubble in their initial creation and funding, and this is the consequence of that bubble: decreased returns, illiquid assets, the end of the 3-year cycle time without the values that were expected. The biggest threat is your third point, as it makes the inevitable bust far more painful if you're able to paper over the long-term issues with short-term money. And the secondary threat is that there is no bust but this just continues on as a slow death, which slowly drains VCs of investment funds from other funds (pensions, etc.), which makes their money more expensive, which sucks out more money, repeat.