Behavioral Economics · Economics

What is your thought on the buzzed about "tech bubble" 2.0?

Mike Whitfield Sr. Software Engineer, EPAM, Google

May 31st, 2015

How will it affect the business landscape? How will it affect the capital landscape for seed<->series A? How will it affect the talent pool? How will people themselves transform as a result of whatever shift is being realized economically (assume you agree a bubble is an economic trickle up of something people already inherently understand with a market lag time to reflect the shift [as would be contrasted with a disaster that shocks the market])?

Please state:
* Your space, and what you have insights into
* What size/scale of a particular sector you think will be affected (startups/SMB's/enterprise)
* Your country of origin/doing business

Please don't state:
* What opportunity you think the bubble creates
* A debate about the assumption that there is a bubble or meta conversation about journalism describing a bubble or ad hominem comments about the people discussing bubbles

Please refrain from commenting on other people's posts. Let responses collect and then observe everything in perspective since that will be most useful for all of us.

Thanks for your participation.

Mike Whitfield Sr. Software Engineer, EPAM, Google

June 1st, 2015

Thanks for the blog post Alex, great insights Joe, any other thought leaders have something to share?

Joe Milam CEO AngelSpan, Inc.

May 31st, 2015

I work in the startup portion of the entrepreneurial ecosystem. Our clients are Seed/A Funded companies, and in a few instances, soon to be Seed funded companies. If the bubble is pricked by a decline in the public markets, than I believe both the late stage/'Uber' funded companies will see a decline in the liquidity now available (affecting both the amount of $'s and the valuations), and likely the AngelList-type 'wealth effect' angel market. The vast # of accredited investors not typically engaged in angel investing (and if they are investors they typically are under weighted (for good reason) as limited partner investors in the 2nd tier (and typically under performing) venture funds. There is a movement for large (Blackstone/Carlyle) PE funds to begin approaching family offices, and I believe this is where deals/funds will begin looking for capital, as family offices are not innovators/early adopters, and as a result will be relatively unaffected by the bubble bursting, as they are quasi-institutional investors that will not just allocate to cash and wait out the public markets, but will re-allocate to asset classes that provide a measurable risk-adjusted return. I believe that capital will replace the 'drive by angel' that pulls in their horns with the bursting bubble, and will raise their allocation to those smaller and earlier stage funds, as those are the asset class that continues to outperform through time. Firms like Right Side Capital Management (1st fund, 266 positions on $7M) will excel, as their 'value add indexing' in the earliest stage companies will continue to outperform. USA/Austin Joe Milam *916.599.6200*

Alex Eckelberry CEO at Meros.io

May 31st, 2015

Well, I've put my thoughts here:

http://blog.eckelberry.com/of-course-were-in-a-bubble-duh/