Zero Interest Rate Policy (ZIRP)

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  • Running a Startup During a Recession

    Startups are a microcosm of the economy and we can observe that things are changing quickly towards a recession footing. The effects of inflation on valuations are readily apparent, but we also see that things were too good to be true and investors and late stage companies exploited it.

  • Crossover Investors Monetize Late Stage Startup Valuations

    Like many financial services hedge-fund crossover investing makes money by charging fees for assets under management. They bring in more investors by showing gains in the market. In late stage startup investing, this creates the incentive to inflate valuations. By deploying larger amounts of money faster than traditional venture capital, hedge-fund crossover investors can win deals and push the valuation higher in subsequent rounds showing higher and higher paper gains.

  • Polycrisis

    Global crises happening all at once re-inforce one another making the effects larger than any individual crisis alone. This polycrisis (originally coined by Edgar Morin), is an entanglement of events like pandemic, war, climate change, and inflation. For example, pandemic leads to inflation and greater political polarization giving rise to far-right movements and less action to address climate change, and so on.

  • What Founders Should Know About Interest Rates

    Between 2008 and 2021, the market was operating under zero-interest rate policy (ZIRP). That changed in 2022 back to historically normal interest rates (5-6%) set by the Federal Reserve.

  • Trading Volume of Nfts Fell 97%

    A recent analysis of the trading volume of NFTs found that it fell 97% from $17 billion in January to $466 million in September.

  • The Six Foot Man in the Stream That Was Five Feet on Average

    The parable of the six foot man who drowned in the stream that was five feet on average is a reminder to plan for the possibility of low ends when building a portfolio. The average can be misleading because there can be large swings that still average out to something you might mistakenly believe is survivable.

  • Surprise Should Come from the Upside Case Only

    If your investments are good only because of future optimism, you will have surprises in the downside case. If your investments are good without optimism required then you will be surprised in the upside case.

  • Magic Vending Machine Business Model

    A lot of startups have a business model which roughly equates to: put a dollar in, get two dollars out. This “magic vending machine” is obviously unsustainable but easy to fool oneself into thinking you have excellent product market fit.