3 ms·
It's different because this time it's VC money, not people's savings. When a company is listed, the stock price better reflect the actual market value of the c
by bello 12y ago
It's different because this time it's VC money, not people's savings.
When a company is listed, the stock price better reflect the actual market value of the company (otherwise a dot-com bubble happens). However, if rich VCs like to bet on startups, that's expected to be a high-risk investment.
- bhouston 12y ago> it's VC money, not people's savings. Well, technically VC money is people's savings, usually parts of pension funds I believe.
- lmm 12y agoA little of it is pension funds or sovereign wealth funds, but most of it is from high-net-worth individuals. Investors are required to be financially sophisticated; they know the risks they're taking.
- davidw 12y agoThe Dot Com bubble was VC-fueled too. Probably more so than this go-round, because it took more capital to start most kinds of companies back then.
- smt88 12y agoIf VCs lose all their money, it won't be anything new. Only a tiny fraction of VCs provide a return, after you take out the managers' fees. Large firms pump money into VCs almost charitably or as a PR thing -- they rarely expect much out of it, and their portfolios certainly aren't made or broken by their VC bets.