
On the Road to Recap - sferik
http://abovethecrowd.com/2016/04/21/on-the-road-to-recap/
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mbesto
> _The healthiest thing that could possibly happen is a dramatic increase in
> the real cost of capital and a return to an appreciation for sound business
> execution._

In which we'll start another cycle in about 4-5 years promoting "growth growth
growth" and do the same thing over and over again. We're on track for our 3rd
7-year cycle (1995-2002, 2002-2009, 2009-2016), so if you're an entrepreneur
and you time it right, the next 1-2 years is the best time to start because
exits will be best around 5-6 year mark.

~~~
maxerickson
I think if we crash, we are going to crash harder than we did in 2008.

The stuff the government (and Fed) did in 2008 and since can't really be
repeated. We could try even bigger fiscal stimulus (government spending rather
than monetary policy), but there are too many people that will lose their shit
over that happening. There's also not really any monetary policy tools that
are left when money is free and the Federal Reserve owns trillions of dollars
of household debt.

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nostrademons
Tech will crash harder than 2008 (but not as hard as 2000).

The overall financial system will probably do a bit better, unless the student
loan bubble blows at the same time. The dollar amounts in tech are _tiny_
compared to the housing or student loan markets; there's just not as much room
to go downwards.

~~~
roymurdock
I'm not so sure about this. What concerns me is not the private VC money in
tech, but the public pension/retirement funds in companies like Twitter,
Fbook, LinkedIn, etc. which are all ~70% institutionally owned.

Housing/student loan market seems pretty tight to me. Students loans cannot be
discharged and house lending standards are under strict scrutiny due to 2008.

Would be interested to see any #s you have though.

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NelsonMinar
This essay is important. Many terrific insights into the distortion in the
late-stage private markets. But also really strong language. Hearing a GP at
Benchmark say 'This “you are so lucky to have this opportunity” pitch is
eerily Madoffian' is astonishing.

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bernardlunn
Great time to start a capital efficient venture and as mbesto says exit in the
next cycle. In the meantime, a world of pain for high burn ventures

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CorbenDallas
Read it as "on the road to rehab" :)

