According to the WSJ:
“The market for high-technology start-up businesses is so intense in Silicon Valley that some companies are being showered with millions of dollars from investors — without even asking for it.”
I don’t see a problem with all the liquidity here. The IPO market is not wide open, therefore exits are based on M&A instead of someone’s IRA. In other words, the right people are buying into the investments. Private equity overhang has been part and parcel low startup costs, so it is nice to see the capital finally being deployed. It is going to lead to job creation, and a few blockbuster products.
There is no question that some hype is good – all we need to ask now is where we are in the hype cycle, and how much hype is too much.
But no matter, Aunty Belle’s retirement money likely won’t get burned this time.
Ah, and someone else agrees. The level of risk depend on who is taking it, not how much capital is being deployed.