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Brit here, so it's always interesting to see how things operate across the pond. We have an AIM market in the UK, which is a junior market. There are some good

Brit here, so it's always interesting to see how things operate across the pond. We have an AIM market in the UK, which is a junior market. There are some good quality companies on there, mixed-in with a hell of a lot of the worst dreck imaginable. The US has a lot more entrepreneurship than the UK, and I think it is something that us Brits could well do more of. In the UK we're too conservative, whilst the US plays it much more fast-an-loose. The UK has its fair share of financial scandals, mind. I get the impression that in the US there has been far too much money chasing after far too opportunities. Blasting through $10b in a single business seems, shall we say, "quite an achievement." I mean, Juicero, what was that crap, anyway? And then there was the whole Elizabeth Holmes thing. It would have been a large-cap company by UK standards. It seems that there's a lot of US "businesses" out there who are looking to hoover a lot of that sweet sweet VC lolly. I'm not sure what "due diligence" the VC guys are doing, but it doesn't seem much. Another thing I have noticed is that, fairly recently, VC has seemed to switch into reverse gear. Now growth seems to be de-emphasised. It's like the whole Venture Capital market has collectively woken up one day and decided that they are much more sceptical about funding growth opportunities. What has changed really, though? It seems that just because Facebook and a couple of other titans decided to have a round of layoffs, that everyone else should, too. It's not really logical when you think about it. Sure, there's the whole Covid and Russian conflict thing throwing a spanner in the works, but have things really changed that much? It seems more a case of a lack of "animal spirit" compared to formerly that is causing the problems rather than any real problems themselves.

pcurve 4y ago
"What has changed really, though? " Inflation. :-/
JustLurking2022 4y ago
Interest rates can change everything. This is a logical extreme but think of it this way - when you can get a 0% loan, does anything have a cost? Sure, there's a price tag but if you can finance it without any interest, you're only paying principle. Now, if you can continue finding more 0% financing to cover those principle payments, any profit the business makes at all is a good return since you put nothing into it. While we weren't quite to that situation, the last decade of near zero interest rates put VCs precariously close to it.
- user_named 4y ago
  Principal.
  - JustLurking2022 4y ago
    No one cares. Autocorrect does its thing, sometimes for good, sometimes not.
beambot 4y ago
> What has changed really, though? Macro: We had exceptionally low interest rates creating a debt bubble coupled with unprecedented Fed printing. To put it into perspective: we printed $6-Trillion USD on COVID stimulus compared to FDR's New Deal at $1-Trillion USD (today dollars). Micro: Bubble popping. Public price-to-sales ratios fell substantially. Declines in consumer spending, inflation, and supply chain hiccups compressed margin. Lending rates went up, liquidity went down, and commercial realestate is still bracing for impact. Late-stage mega funds slowed their investing in the face of redemption threats. IPOs and SPACs became unpalatable. So early stage funds sitting on loads of cash raised pre-2022 are waiting on the sidelines to see where it falls out & who emerges.
- cipheredStones 4y ago
  > To put it into perspective: we printed $6-Trillion USD on COVID stimulus compared to FDR's New Deal at $1-Trillion USD (today dollars). Worth noting that inflation-adjusted GDP was $1T in 1930 and $19T in 2019.
  - deleted 4y ago
    [deleted]
  - beambot 4y ago
    1930 GDP was (at the time) $100B with NewDeal actual expenditure of $42B (42%), compared with 2019 $19T GDP and $6T COVID (~30%). There's this weird historical effect represented by "Real GDP" that has the 1930s number being 10x that size (whatever that means): https://www.statista.com/statistics/1031678/gdp-and-real-gdp-united-states-1930-2019/ https://www.statista.com/statistics/1031678/gdp-and-real-gdp...
acdha 4y ago
> I get the impression that in the US there has been far too much money chasing after far too opportunities. Blasting through $10b in a single business seems, shall we say, "quite an achievement." Not just the US: the 2008 bubble and the tech bubble both had sovereign wealth funds chasing high returns. The US tech sector was good at convincing them that investments would perform highly but it’s always been amazing to me to see the kind of returns predicted for a cab or shared office space company, and it’s felt like big institutional investors were basically saying they had no idea what to do either but needed to put the money somewhere.
- potatolicious 4y ago
  > "The US tech sector was good at convincing them that investments would perform highly" Part of the issue is that the VCs got very good at convincing themselves that they were geniuses at picking winners, even though in hindsight they clearly had no clothes on. Yeah, low interest rates and cheap money chasing returns definitely helped fuel a historic immolation of vast sums of money, but I feel like it'd be remiss to discuss this without pointing out the complete fecklessness of the VCs in general. These people spent years talking up their thought leadership and their uncanny ability to pick winners, and how it made them Galt-like messianic figures. Any criticism or even just skepticism was derided as anti-progress luddites, or worse - corrupt agents of an evil incumbency. They anointed themselves the heralds of progress itself, in a way that was plainly unearned. I really hope (but am not holding my breath for) a changing of the guard this time around. So much human progress has been denied because we allocated capital so poorly - and chose such incredibly poor stewards for capital allocation.
  - pas 4y ago
    .... hm. wasn't the formula simply bet on 1-2 million on 100 wildly different things and one of them will make billions? > [progress] how would you allocate our economic surplus in a better way?
bnralt 4y ago
> I mean, Juicero, what was that crap, anyway? People can argue that it was too expensive or over-designed. But I don't think the basic idea is as ridiculous as people make it seem. "You can just juice it yourself!" Sure, but the same can be said for a Keurig machine, and they're extremely popular. Having watched what it would take to juice the Juicero packs on your own and having made my own Keurig pods without a machine, my guess is it's probably easier to do your own Keurig (and the Keurig machines seem to be more susceptible to getting dirty than Juicero machines). Keep in mind they weren't juice packs that were being squeeze, but rather they were pieces of fruit and vegetables that could have the juices readily squeezed out. I haven't tried the juice - just about no one has - but if it was able to give the taste of fresh squeezed juice in seconds time it seems it would at least be notable. There's not really a better solution at the moment (actual juicing takes a lot of time and is very messy and store juice isn't as tasty).

pcurve 4y ago

"What has changed really, though? " Inflation. :-/

JustLurking2022 4y ago

Interest rates can change everything. This is a logical extreme but think of it this way - when you can get a 0% loan, does anything have a cost? Sure, there's a price tag but if you can finance it without any interest, you're only paying principle. Now, if you can continue finding more 0% financing to cover those principle payments, any profit the business makes at all is a good return since you put nothing into it. While we weren't quite to that situation, the last decade of near zero interest rates put VCs precariously close to it.

user_named 4y ago
Principal.
- JustLurking2022 4y ago
  No one cares. Autocorrect does its thing, sometimes for good, sometimes not.

beambot 4y ago

> What has changed really, though? Macro: We had exceptionally low interest rates creating a debt bubble coupled with unprecedented Fed printing. To put it into perspective: we printed $6-Trillion USD on COVID stimulus compared to FDR's New Deal at $1-Trillion USD (today dollars). Micro: Bubble popping. Public price-to-sales ratios fell substantially. Declines in consumer spending, inflation, and supply chain hiccups compressed margin. Lending rates went up, liquidity went down, and commercial realestate is still bracing for impact. Late-stage mega funds slowed their investing in the face of redemption threats. IPOs and SPACs became unpalatable. So early stage funds sitting on loads of cash raised pre-2022 are waiting on the sidelines to see where it falls out & who emerges.

cipheredStones 4y ago
> To put it into perspective: we printed $6-Trillion USD on COVID stimulus compared to FDR's New Deal at $1-Trillion USD (today dollars). Worth noting that inflation-adjusted GDP was $1T in 1930 and $19T in 2019.
- deleted 4y ago
  [deleted]
- beambot 4y ago
  1930 GDP was (at the time) $100B with NewDeal actual expenditure of $42B (42%), compared with 2019 $19T GDP and $6T COVID (~30%). There's this weird historical effect represented by "Real GDP" that has the 1930s number being 10x that size (whatever that means): https://www.statista.com/statistics/1031678/gdp-and-real-gdp-united-states-1930-2019/ https://www.statista.com/statistics/1031678/gdp-and-real-gdp...

acdha 4y ago

> I get the impression that in the US there has been far too much money chasing after far too opportunities. Blasting through $10b in a single business seems, shall we say, "quite an achievement." Not just the US: the 2008 bubble and the tech bubble both had sovereign wealth funds chasing high returns. The US tech sector was good at convincing them that investments would perform highly but it’s always been amazing to me to see the kind of returns predicted for a cab or shared office space company, and it’s felt like big institutional investors were basically saying they had no idea what to do either but needed to put the money somewhere.

potatolicious 4y ago
> "The US tech sector was good at convincing them that investments would perform highly" Part of the issue is that the VCs got very good at convincing themselves that they were geniuses at picking winners, even though in hindsight they clearly had no clothes on. Yeah, low interest rates and cheap money chasing returns definitely helped fuel a historic immolation of vast sums of money, but I feel like it'd be remiss to discuss this without pointing out the complete fecklessness of the VCs in general. These people spent years talking up their thought leadership and their uncanny ability to pick winners, and how it made them Galt-like messianic figures. Any criticism or even just skepticism was derided as anti-progress luddites, or worse - corrupt agents of an evil incumbency. They anointed themselves the heralds of progress itself, in a way that was plainly unearned. I really hope (but am not holding my breath for) a changing of the guard this time around. So much human progress has been denied because we allocated capital so poorly - and chose such incredibly poor stewards for capital allocation.
- pas 4y ago
  .... hm. wasn't the formula simply bet on 1-2 million on 100 wildly different things and one of them will make billions? > [progress] how would you allocate our economic surplus in a better way?

bnralt 4y ago

> I mean, Juicero, what was that crap, anyway? People can argue that it was too expensive or over-designed. But I don't think the basic idea is as ridiculous as people make it seem. "You can just juice it yourself!" Sure, but the same can be said for a Keurig machine, and they're extremely popular. Having watched what it would take to juice the Juicero packs on your own and having made my own Keurig pods without a machine, my guess is it's probably easier to do your own Keurig (and the Keurig machines seem to be more susceptible to getting dirty than Juicero machines). Keep in mind they weren't juice packs that were being squeeze, but rather they were pieces of fruit and vegetables that could have the juices readily squeezed out. I haven't tried the juice - just about no one has - but if it was able to give the taste of fresh squeezed juice in seconds time it seems it would at least be notable. There's not really a better solution at the moment (actual juicing takes a lot of time and is very messy and store juice isn't as tasty).