It’s the increases in interest rates. The Venture Capitalists are ok not seeing a return on their investments while interest rates are effectively nil, but higher interest rates change the risk/reward balance.
It does look like the 1 year tbill is back at the rate in the 90’s. for comparison, the inflation rate. Doesn’t really change the fact that the reason interest went up was because the Fed is combating inflation however.
Is high inflation really the thing causing all these companies to kill their golden geese?
No. No, not at all.
It’s the increases in interest rates. The Venture Capitalists are ok not seeing a return on their investments while interest rates are effectively nil, but higher interest rates change the risk/reward balance.
I mean, why are interest rates high? indirectly its inflation
They’re not actually high, though. They were basically non-existent for 15 years, but now they’re basically back to 2007 levels.
This is VC’s signalling that they don’t believe these social platforms can survive in an era where money isn’t literally free for them.
It does look like the 1 year tbill is back at the rate in the 90’s. for comparison, the inflation rate. Doesn’t really change the fact that the reason interest went up was because the Fed is combating inflation however.