Tech Bubble to Explode Soon

[Jaybird]

Venture Capitalist Says We Have Entered a Tech Bubble

 

 

Todd Dagres, a founding partner at venture capital firm Spark Capital in Boston, is bucking the current rhetoric in Silicon Valley, saying there are comparisons to be drawn. “We are definitely in a bubble. This one is not as bad as 2000,” Dagres said. “If you wake up in a room full of unicorns, you are dreaming and you can’t expect the dream to continue.”

 

More than 50 U.S. venture-backed tech startups reached a valuation of $1 billion or more in the past two years, according to CB Insights, a research firm in New York. The list of companies doubling their valuation is growing and includes room-sharing service Airbnb Inc., which is raising $1 billion at a valuation of $20 billion or more. Snapchat Inc., which makes a mobile app for sending photos, and Pinterest Inc., an online scrapbooking site, are both in talks to raise financing at valuations of $19 billion and $11 billion, respectively.

 

"...“we are not in a valuation bubble, as the mainstream media seems to think. We are in a risk bubble," [said Gurley]..."

 

 

Source: http://www.bloomberg.com/news/articles/2015-03-05/this-venture-capitalist-is-willing-to-say-we-re-in-a-tech-bubble

 

 

 

 

 

 

 

It seems we are in a high risk high reward market when it comes to investing in technology companies. I am no expert on the matter but alot of these companies do seem to be inflated for what they offer, service. It will be interesting to see how this plays out in the next 5 to 10 years. what are your thoughts on this bubble?

[Admiral Naismith]

Interesting read, thanks for the post.

 

I don't really care for this bubble, I prefer a bunch of little multi-colour bubbles myself.

[Jaybird]

Interesting read, thanks for the post.

 

I don't really care for this bubble, I prefer a bunch of little multi-colour bubbles myself.

I would agree but these bubbles revolve more around your entertainment such as instagram, snapchat, Whatsapp, etc. I am interested to see what would happen if it were to pop. 

[Admiral Naismith]

I would agree but these bubbles revolve more around your entertainment such as instagram, snapchat, Whatsapp, etc. I am interested to see what would happen if it were to pop. 

The Great Techession.

 

Imaging it! Monitors begging on the streets, GPUs selling their cores for quick cash, your local app maker closing shop and boarding up the windows...

 

Oh the horror!

[Jaybird]

The Great Techession.

Imaging it! Monitors begging on the streets, GPUs selling their cores for quick cash, your local app maker closing shop and boarding up the windows...

Oh the horror!

Wrong tech companies. The ones in Question are service related companies which offer no tangible product.

[Admiral Naismith]

Wrong tech companies. The ones in Question are service related companies which offer no tangible product.

 I know, but my imagination went into overdrive

 

It will be interesting to see if/when it happens.

[Toddwjp]

only because the current economic polices of the west create bubbles.

[HalGameGuru]

If anything this proves we have a currency bubble. Access to mass produced liquidity is causing an upswing in investment with a massive myopic obfuscation of the risk. Risk is downplayed because of the easy access to capital. There is so much money sitting they see it as worth the risk to lose massive amounts in malinvestment rather than let it sit and devalue as more is produced.

 

And as in many of the bubbles before the bubble itself is merely a symptom, its the forces that lead to its creation, the fed, credit bias, and money supply that are the problem.