Are frenzied VC investing and jittery markets reason for concern?
Over the past two weeks, I've seen several signs that we may be on the precipice of another bubble burst. TechCrunch reported earlier in the week that VC investing has reached it's highest level since 2001 - $979 million was invested in Q2 alone, 52% more than Q2 last year. It's true that the public equity markets, specifically the IPO market hasn't exploded in the same way that it did in 2000, but I think that's partially because other exit strategies have become more attractive and less risky for both VCs and entrepreneurs. At the same time, housing market/mortgage jitters are beginning to be felt in areas of the country. The MSCI US REIT INDEX was down four straight days this week, and is now 22% off its February all-time high. The S&P was down 5% this week, which included the biggest single-day drop for DJIA in 6 months. The NASDAQ was down 4.6%. It seems like the whole world has been speculating for several years about when the housing market bubble will pop. As for the technology market, could this all mean that we're nearing the end of Web2.0 and entering the purgatorial stage before Web3.0 blossoms? If so, it may be time time to put that business plan on hold and start retooling for the next wave. In either case, I think the sharper up and down trends that we may be experiencing are indicative of the maniacal outlook which we Americans have adopted. It reminds me of a book - American Mania - that I read a few years ago. The "get rich quick" scenario - which motivates me - makes the "get poor quick" outcome a possibility. I just came up with that now, but I think it's something worth considering over the weekend:)