More VC Anxieties Apparent

VC Paul Kederosky recently posted a prophesy that there’ll be a massive crash in VC.

His analysis seems sound, but I’d boil it down to a simpler point.

Interest rates are being held at a phenomenally low level. It’s been that way for years. Money that would otherwise seek out conservative investment has rushed into startups, seeking outsized speculative gains.

That’s just textbook Austrian Business Cycle Theory (ABCT), and is totally unsurprising to anyone aware of that dynamic.

On a more local note, Nate Westheimer, leader of the NY Tech Meetup, posted some concerns about maintaining the NY “tech ecosystem.”

I’ve heard similar concerns from entrepreneurs in and out of NY – no one wants to go to Silicon Valley if they can help it. And I don’t blame them. NYC is more pleasant to live in than anywhere in CA.

My suggestion is still to go public overseas. As if on cue, the WSJ posted an item today entitled “The SEC’s Russian Roulette.”

It uses the example of a typical penny stock scam company with $100 in assets and no business model becoming a $200 million company.

That’s… impressive!

What’s stopping anyone – with a legitimate company – from following that lead? What are the legal hurdles, if any? There are more IPOs happening this year than in years previous, but… why not increase the rate by going overseas? You can’t tell me that it’s impossible to raise money if a penny-ante stock scammer could pump up a company to $200 million using  that method.

Why do I care? I like startups. I like new technology. I want to see more businesses succeed in offering products and services that transform the way we all live and do business.