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http://blogs.reuters.com/felix-salmon/2012/05/07/how-venture-capital-is-broken/ http://blogs.reuters.com/felix-salmon/2012/05/07/how-venture... The bubble is n

by wisty 14y ago

http://blogs.reuters.com/felix-salmon/2012/05/07/how-venture-capital-is-broken/ http://blogs.reuters.com/felix-salmon/2012/05/07/how-venture... The bubble is not in IPOs, it's in VC. Venture capitalists having been losing money for a decade. Their General Partners are starting to cotton on, and will start pulling funding. Yes, there's good VCs which do make a bit, and a few lucky ones, but many VCs are taking money from "bucket fillers" - institutions who are told "put X% in VC". These "bucket fillers" have to invest the money, and the top VCs already have enough cash, so it goes to less savvy VCs who invest it in the startups who couldn't get funded by the good VCs.

adventureful 14y ago
Some of it is definitely in stocks / IPOs. RAX had a 100 pe ratio recently. That's as high as Cisco was during the dotcom bubble. CRM has no PE ratio at all, despite their monstrous market cap. Amazon has a zillion PE ratio because they're not making much money any longer. There's a very long list at this point of tech stocks with crazy valuations. When people do their anti-bubble refutes, they only list stocks like HP or EBAY or MSFT or INTC or AAPL, and they ignore the big pile of other tech stocks with massive valuations. ZNGA and GRPN were both bubble stocks, priced to extremes, and worth nowhere near what they IPO'd at. Pandora, HomeAway, and on the list goes. I bet I can name 40 from the last three years.