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The ZIRP thing makes no sense, very few tech companies were funded by loans besides a bit of convertible notes here and there. Funding for small to medium compa
by downWidOutaFite 3y ago
The ZIRP thing makes no sense, very few tech companies were funded by loans besides a bit of convertible notes here and there. Funding for small to medium companies was from VC and acquisitions, bigger tech was funded by stock appreciation and massive profits.
- fizx 3y agoInterest rates have many 2nd order effects, including VCs getting more funding from their LPs, and future-looking stocks becoming a more appealing investment class. Its not just about loans.
- nine_zeros 3y agoMany VCs get money from LPs who play different kinds of leverage games with various time horizons.
- dventimihasura 3y ago1. Where did VCs get the capital to fund those small to medium companies? 2. What does ZIRP do to stock appreciation? Does it tend to suppress it or enhance it? 3. What massive profits?
- jemmyw 3y agoI believe the idea is not that companies were being funded by loans. It's that investors couldn't get a return on savings, so all the money they would normally have in saving like deposits was invested elsewhere, into the VCs for example.