[PreMoney SF 2015] Anand Sanwal: "A Quantitative Look At Bubbles, Unicorns, Fund Formation + More"

TL;DR

Examining the debate on whether the market is experiencing a bubble, considering both sides of the argument.

Transcript

so thanks for having me i think i have 15 minutes and i-44 slide so the it's not going to go very well so i'm going to spend 10 seconds on blatant self-promotion and then we will get in to talk about bubbles and unicorns and all that good stuff so about us we are a data company we are a Bloomberg for private companies if we need to tag line if you ... Read More

Key Insights

• 👁️‍🗨️ Debate centered around the existence of a market bubble based on multiple factors.
• 🍭 Discussion on VC funding and IPO activities influencing market perceptions.
• 👶 Impact of new market participants like large corporations and hedge funds.
• 🔒 Contrasting behaviors between public and private markets regarding valuation and exits.
• 👁️‍🗨️ Consideration of the potential slow deflation instead of a rapid pop in a bubble scenario.
• 👁️‍🗨️ Emphasis on investor behavior, rationality, and the role of data in bubble analysis.
• 🥺 Opacity of private markets leading to challenges in predicting and addressing a potential bubble.

Questions & Answers

Q: What are some indicators suggesting a market bubble, according to the speaker?

The speaker mentions signs like high valuation multiples, the rise of unicorns, and the influx of new investors as indicators of a potential market bubble.

Q: How is the public market behaving in contrast to the private market regarding a bubble scenario?

The public market is showing more rationality with contraction in values compared to the private market, which is experiencing high valuations and investments despite shaky exits.

Q: What role do large corporations and institutional investors play in the current market dynamics?

Large corporations and institutional investors, like hedge funds and corporates, are increasingly investing in startups, impacting market dynamics and potentially influencing the bubble debate.

Q: How does the speaker address the concept of a bubble in the context of private market opaqueness?

The opaqueness of the private market allows for a slower contraction of values, leading to potential challenges in identifying and addressing a bubble compared to the public market's transparency.

Summary & Key Takeaways

• Discussion on the existence of a market bubble with various indicators.

• Analysis on VC funding, IPO activity, and the role of new market players.

• Reasons for and against the market being in a bubble scenario.