3 ms·
Absurd valuations = cheap money in the context of startup fundraising.
by onlyrealcuzzo 4y ago
Absurd valuations = cheap money in the context of startup fundraising.
- parkingrift 4y agoMaybe so. I don't conflate cheap with easy.
- lazide 4y agoCheap money means lenders or investors will be more likely to compete for what they perceive to be a good deal. More of a ‘sellers market’ from that perspective. If the buyers are hesitant to invest/lend because they’re worried they’ll catch a falling knife, it makes it much harder to close at all and valuations tend to err on the risk adverse rather than the ‘please pick us!’ side.
- ineedasername 4y agoMy own distinction is: Cheap money == fewer strings attached & better $$ to equity ratio. [0] Easy money == ideas or MVP's with weaker plans or market fit get funding at all. [0] this has the side effect of raising valuation.
- jxf 4y agoThe implication of the equality is backwards. Cheap money _drives_ absurd valuations.
- danuker 4y agoThen again, a company flush with cash will spend more, making money go round and more available. So maybe absurd valuations also drive cheap money. All income is someone else's expense.