> Let’s say Angel and VC money dries up, and Series A funding also dries up. You then have a bunch of start ups that don’t get funded at all, or who burn through their first Angel/VC raise, and then can’t get any further funding. They then can’t afford to hire or keep talent (hackers, system admins, designers, etc. – i.e. the people here) and there are only so many positions at companies like Apple, Google, Facebook, etc.
This is precisely what the view looks like for those inside the bubble. Outside the bubble, that would be called a return to normalcy. A world in which solid businesses that have a prayer of actually returning investor money are rewarded and those that don't, die on the vine. The reality is that if you can't raise money for your startup and you aren't making enough to pay your employees, your business sucks and it's time to do something other than create slide decks and beg people for money.
hmmm...not sure I agree that "you can't raise money for your startup and you aren't making enough to pay your employees, your business sucks".
When funding dries up, even good businesses have a very difficult time raising capital, and it's not uncommon for a "good" business to be unprofitable for a couple of years (or more) as it ramps up. (See Amazon, Twitter, etc.)
I should have been more clear. What I meant by those example is that the companies were not profitable in their early years, and paying employees may have been difficult without the capital they had raised.
Well my point was that if you can't raise money and you aren't making profits, then your business sucks. That was poorly worded, but Amazon and Twitter never had a problem raising capital when they needed it because there was a huge amount of competition to get into them.
The companies that aren't profitable in their early years and simultaneously can't raise cash are screwed and probably shouldn't be funded in the first place.
This is precisely what the view looks like for those inside the bubble. Outside the bubble, that would be called a return to normalcy. A world in which solid businesses that have a prayer of actually returning investor money are rewarded and those that don't, die on the vine. The reality is that if you can't raise money for your startup and you aren't making enough to pay your employees, your business sucks and it's time to do something other than create slide decks and beg people for money.