

Ask HN: How much of an impact do you expect from Fed tapering?  - jjoe

How much of an impact do you expect the ongoing Fed tapering to have on money investment in new startups? So far financial markets aren&#x27;t taking it well.<p>But here&#x27;s what I think will happen:<p>1) Interest rates will increase steering investors away from risky startup investments and into high IR financial instruments<p>2) Investment money will dry up in the short term leading to a rough landscape and a tough environment for those needing to raise cash<p>3) Seemingly good startups (even by toughest critics) won&#x27;t be able to raise money unless they have a solid business plan<p>What do you think? Are you worried?
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phantom_oracle
You are forgetting the lag effect.

It will take a while for this to trickle to the VC market. Consider a
situation where most of them have already raised funds. They may become more
picky because of reanalyzing long-term effects (shittier IPOs), but they will
still have money to invest.

If you are worried, perhaps you should consider the alternate: bootstrapped
model.

It seems that even though bootstrapped companies grow much slower, these
companies are a lot more healthy and aren't regulated as much by financial
markets (no boom or bust models).

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rajacombinator
The whole thing is a head fake. Even more money will flow into the startup
world when they ramp up the next level of QE.

