On slide 9, the author mentions that SaaS valuation multiples "have proven to be somewhat inversely correlated with rates." That makes sense to me: The net pre

On slide 9, the author mentions that SaaS valuation multiples "have proven to be somewhat inversely correlated with rates." That makes sense to me: The net present value or NPV of every dollar of earnings in the future is worth less when interest rates rise. The natural question to ask is: How much can interest rates rise, e.g., in the US? To answer that question, we should start by asking an easier question: How much have interest rates risen in the past during periods of high inflation -- say, from the mid 1970's to the early 1980's in the US? According to the Federal Reserve's FRED database, 10-year and 30-year US treasury rates peaked at a mind-boggling ~16%, or ~8x greater than today's 10-year and 30-year treasury rates. Take a look for yourself: https://fred.stlouisfed.org/graph/?g=MTuo https://fred.stlouisfed.org/graph/?g=MTuo If long-term treasury rates rise to a seemingly ridiculous 8x current levels, tech valuation multiples could come down by as much as 80% or 90%, because most of the profits of tech companies are generally expected to be earned in the very distant future. If long-term treasury rates to "more historically typical level" of say, 4%, or 2x today's levels, tech valuation multiples could come down by as much as half. Caveat emptor.