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This, in a nutshell, is why the human condition is so tragic. This won't be "interesting", believe me. Watch what happens when the body of startups funded by gl

This, in a nutshell, is why the human condition is so tragic. This won't be "interesting", believe me. Watch what happens when the body of startups funded by global pools of capital (which are the underlying source of capital for VCs) sees the NPV of software startups vanish as lower expected investment returns smack up against higher risk-free rates. The current software economy is incredibly leveraged and intertwined. Most startups are not cashflow positive, and they're explanation for that is that they have low CapEx. However, it's all been transferred to OpEx that is the web of mutuality between them. There is a huge body of low quality startups that are going to stop paying monthly Slack, Git(hub/lab), Trello/Atlassian, Twilio, Mongo, every other monthly-billed service, and put the breaks on AWS/GCE/et al spending. The AWS spending, for example, will result in layoffs in Seattle, which will lead to people forced out of their homes and forced sales for losses (which will ruin them financially), and that will result in a cycle of real estate deflation (which, as you saw in 2006, leats to pools of buyers trapped in their home, killing construction and labor mobility). And thankfully we'll have deregulated or de-fanged federal regulators just in time for all of this! WeWork is the obvious first bankruptcy, since they almost entirely exist because of venture funding froth. I don't know who have funded them offhand, but that might result in forced selling of private shares and lower private valuations, with further deflation risks in that sector. Then it will expand to the broader economy. /rant. edit: I worked through both the dot-com and mortgage-backed security fraud crises. They were terrible.

matte_black 8y ago
So when WeWork files for bankruptcy is that the signal to start moving into cash?
- throwaway5752 8y ago
  Sorry for a bit of a meta-reply, but this is kind of the reason for my sadness: there is this sense of isolation/aloofness to your question. The best thing to do is to work hard to prevent this outcome, since it's less than zero sum. I am sorry, but even if I knew your financial situation and goals I wouldn't want to offer investing opinions.
  - mancerayder 8y ago
    It's not aloofness or isolation - and it's perhaps less sad if you consider that people -- by force of things -- are going to explore how to survive best during tragedies (which includes helping their families). The finger-wagging at corrupt or inefficient systems is important at a certain intellectual level; the rest of us have to think about mortgages and other such earthly things.
    - throwaway5752 8y ago
      Just standard advice that is widely available is to have at least 3-6 months of emergency funds (liquid cash to cover all monthly expenses) and err on being conservative.
  - matte_black 8y ago
    I’m not sure what I’m supposed to do to prevent a financial collapse across the nation... I’ve made tons of money from the usual FANG suspects in the past few years, but it’s all unrealized gain. No doubt I’ve thought about selling off every year, but chose instead to continue riding it out, always wondering how much it’s going to take for me to be satisfied. On days like today when FANG stocks are getting beat up, I wonder how much longer this can really go. Every year that passes I take more seriously any sign that suggests these stocks can no longer defy gravity.
    - throwaway5752 8y ago
      ... in the scope of a public forum, I don't want to go off-topic or give advice (which may well be wrong and cost you money). But you should ask yourself what your investments are worth, and why they are worth that. If you can't answer those questions, that is your first problem. Then you should ask if you have better returns elsewhere in various scenarios (repaying debt, moving to more fixed/safer income streams) based on your personal situation and goals. Best of luck, I hope that is useful. Don't underestimate your personal agency to change the world around you.
    - saltcured 8y ago
Bromskloss 8y ago
So, it _will_ be interesting, after all! Now, how do we make money from this?
- rainbowmverse 8y ago
  Startup idea: knowledge sharing, resume hosting, and real estate/rental listing platform for people chasing their current quality of life at a lower cost of living.
Zimahl 8y ago
> Watch what happens when the body of startups funded by global pools of capital ... sees the NPV of software startups vanish as lower expected investment returns smack up against higher risk-free rates. I don't know exactly what that means, but if it means what I think it does, I've been there. I was at a startup in 2001 and we were getting interest from VCs, to move out of angel funding. The economy was already slowing but then 9/11 happened and there wasn't a VC that was shopping for at least 6 months, all the investment money dried up literally overnight. We barely survived on salary austerity and a RIF.
tjr225 8y ago
I am worried and troubled for sure. I also can't help but feel like there has to be a better way.

matte_black 8y ago

So when WeWork files for bankruptcy is that the signal to start moving into cash?

throwaway5752 8y ago
Sorry for a bit of a meta-reply, but this is kind of the reason for my sadness: there is this sense of isolation/aloofness to your question. The best thing to do is to work hard to prevent this outcome, since it's less than zero sum. I am sorry, but even if I knew your financial situation and goals I wouldn't want to offer investing opinions.
- mancerayder 8y ago
  It's not aloofness or isolation - and it's perhaps less sad if you consider that people -- by force of things -- are going to explore how to survive best during tragedies (which includes helping their families). The finger-wagging at corrupt or inefficient systems is important at a certain intellectual level; the rest of us have to think about mortgages and other such earthly things.
  - throwaway5752 8y ago
    Just standard advice that is widely available is to have at least 3-6 months of emergency funds (liquid cash to cover all monthly expenses) and err on being conservative.
- matte_black 8y ago
  I’m not sure what I’m supposed to do to prevent a financial collapse across the nation... I’ve made tons of money from the usual FANG suspects in the past few years, but it’s all unrealized gain. No doubt I’ve thought about selling off every year, but chose instead to continue riding it out, always wondering how much it’s going to take for me to be satisfied. On days like today when FANG stocks are getting beat up, I wonder how much longer this can really go. Every year that passes I take more seriously any sign that suggests these stocks can no longer defy gravity.
  - throwaway5752 8y ago
    ... in the scope of a public forum, I don't want to go off-topic or give advice (which may well be wrong and cost you money). But you should ask yourself what your investments are worth, and why they are worth that. If you can't answer those questions, that is your first problem. Then you should ask if you have better returns elsewhere in various scenarios (repaying debt, moving to more fixed/safer income streams) based on your personal situation and goals. Best of luck, I hope that is useful. Don't underestimate your personal agency to change the world around you.
  - saltcured 8y ago

Bromskloss 8y ago

So, it _will_ be interesting, after all! Now, how do we make money from this?

rainbowmverse 8y ago
Startup idea: knowledge sharing, resume hosting, and real estate/rental listing platform for people chasing their current quality of life at a lower cost of living.

Zimahl 8y ago

> Watch what happens when the body of startups funded by global pools of capital ... sees the NPV of software startups vanish as lower expected investment returns smack up against higher risk-free rates. I don't know exactly what that means, but if it means what I think it does, I've been there. I was at a startup in 2001 and we were getting interest from VCs, to move out of angel funding. The economy was already slowing but then 9/11 happened and there wasn't a VC that was shopping for at least 6 months, all the investment money dried up literally overnight. We barely survived on salary austerity and a RIF.

tjr225 8y ago

I am worried and troubled for sure. I also can't help but feel like there has to be a better way.