Tech Bubble the Next One To Burst
May 2, 2016 (EIRNS)—The tech bubble today is going the way of the dot com bubble in 2000, The Wall Street Journal reports today, citing as a key source the unsavory Keith Rabois of the very sleazy Khosla Ventures, whose involvement in green fascist schemes, biofuels, etc. is notorious, going back years.
Rabois warns that startup investment has cooled, and valuations are falling, but, as in 2000, many investors haven’t yet figured out the reality. When they do, "all hell breaks loose," he predicts.
As of April 18, initial public offerings (IPOs) have "all but disappeared," the Journal reports; and even though venture capitalists have raised a huge amount of capital in the first quarter, they’ve done so only because
"they believe their own metrics are inflated at the moment, and they want to get that money before companies in their portfolios start crashing and burning."
Companies are slashing spending and firing employees, preparing for the worst, while many startups, according to the Journal "are at risk of being stranded as funding dries up." Particularly vulnerable are capital-intensive startups that were initially able to access easy-money financing. Because venture-capital firms are interlinked, Rabois predicts, there will be a "catastrophic shift downward," across the spectrum of startup investing.
One venture capitalist at Artiman Ventures in Palo Alto, California, told the Journal, "without a doubt, the fear cycle is what we’re living through right now."