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i don't benefit from the bubble. it drives up the cost we have to pay to invest in companies. i pray for the day the markets tumble.

wiredd 14y ago
True, but the other side of the coin is that investments can exit at much higher value in a bubble environment.
tatsuke95 14y ago
It's not the price that matters, it's the activity level. House-flippers don't complain about the price of the house; returns are relative. You can't honestly tell me that times like this aren't better than, say, 2003? Now, I don't mean to imply that you, personally, have some sinister intentions to keep the bubble going. But in general, VCs have to speak highly of the industry. Otherwise, how do they explain any investment? If I'm wrong, and I could be, I'd love to see some examples of tech VCs who are actively calling a bubble. I'll bet there aren't many, and that's no coincidence.
- fredwilson 14y ago
  we raised a fund in 2003. i remember it well. it took us a year to raise that fund. nobody wanted to invest in internet startups. that fund will go down in history as one of the best VC funds raised. certainly one of the best of that decade. price matters. environment matters. that was a much better time to invest than now.
redthrowaway 14y ago
That's disingenuous. How have the companies you funded in 2005 been doing? For those that were acquired or IPO'd, the current valuation bubble has benefited you immensely. The amount you invest in new companies pales in comparison to the payout from a company like Groupon. Granted, few investors have a Groupon in their portfolio, but you're still getting paid more than you would without inflated valuations.
- fredwilson 14y ago
  we are not investors in groupon. ugh. yuck.
  - redthrowaway 14y ago
    I wasn't suggesting that you were, but rather that the valuation bubble has meant the exits of companies you've invested in have been higher than they otherwise would be. It costs you more to invest now, but that's offset by the increased income from companies you invested in pre-bubble.

wiredd 14y ago

True, but the other side of the coin is that investments can exit at much higher value in a bubble environment.

tatsuke95 14y ago

It's not the price that matters, it's the activity level. House-flippers don't complain about the price of the house; returns are relative. You can't honestly tell me that times like this aren't better than, say, 2003? Now, I don't mean to imply that you, personally, have some sinister intentions to keep the bubble going. But in general, VCs have to speak highly of the industry. Otherwise, how do they explain any investment? If I'm wrong, and I could be, I'd love to see some examples of tech VCs who are actively calling a bubble. I'll bet there aren't many, and that's no coincidence.

fredwilson 14y ago
we raised a fund in 2003. i remember it well. it took us a year to raise that fund. nobody wanted to invest in internet startups. that fund will go down in history as one of the best VC funds raised. certainly one of the best of that decade. price matters. environment matters. that was a much better time to invest than now.

redthrowaway 14y ago

That's disingenuous. How have the companies you funded in 2005 been doing? For those that were acquired or IPO'd, the current valuation bubble has benefited you immensely. The amount you invest in new companies pales in comparison to the payout from a company like Groupon. Granted, few investors have a Groupon in their portfolio, but you're still getting paid more than you would without inflated valuations.

fredwilson 14y ago
we are not investors in groupon. ugh. yuck.
- redthrowaway 14y ago
  I wasn't suggesting that you were, but rather that the valuation bubble has meant the exits of companies you've invested in have been higher than they otherwise would be. It costs you more to invest now, but that's offset by the increased income from companies you invested in pre-bubble.