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Ask HN: How much of an impact do you expect from Fed tapering?
How much of an impact do you expect the ongoing Fed tapering to have on money investment in new startups? So far financial markets aren't taking it well.
But here's what I think will happen:
1) Interest rates will increase steering investors away from risky startup investments and into high IR financial instruments
2) Investment money will dry up in the short term leading to a rough landscape and a tough environment for those needing to raise cash
3) Seemingly good startups (even by toughest critics) won't be able to raise money unless they have a solid business plan
What do you think? Are you worried?
- phantom_oracle 13y agoYou are forgetting the lag effect. It will take a while for this to trickle to the VC market. Consider a situation where most of them have already raised funds. They may become more picky because of reanalyzing long-term effects (shittier IPOs), but they will still have money to invest. If you are worried, perhaps you should consider the alternate: bootstrapped model. It seems that even though bootstrapped companies grow much slower, these companies are a lot more healthy and aren't regulated as much by financial markets (no boom or bust models).
- rajacombinator 13y agoThe whole thing is a head fake. Even more money will flow into the startup world when they ramp up the next level of QE.