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Amid Fiscal Uncertainty, Venture Capital Is Way Down In Silicon Valley

samzenpus posted about 2 years ago | from the holding-the-wealth dept.

Businesses 421

Hugh Pickens writes "With the 'fiscal cliff' just weeks away, Chris O'Brien writes that venture capital fundraising in silicon valley is down, the amount invested is down, the number of folks investing in venture capital is down, and the number of VC firms and partners are down. 'The people I talked to in the industry sounded grim even as they tried to make the case for optimism,' writes O'Brien. 'Still, it remains difficult to identify a clear path for turning things around for the battered venture capitalists who make Silicon Valley hum.' So what's wrong with the VC industry? The problems are many and complex but they can be boiled down to one thing: Not enough exits. For the size of venture capital being raised and invested, there simply aren't enough initial public offerings of stock or mergers and acquisitions to generate the returns that funds need. Venture insiders blame the global economic uncertainty. They believe that is part of the reason that giant corporations, which have amassed huge piles of cash, are just sitting on it, rather then using it to acquire startups. 'The numbers are way down,' said Ray Rothrock, a partner at Venrock. 'All these companies with these fantastic balance sheets, and nobody is really buying anything. With all the uncertainty they're facing with the economy and taxes, buying little companies is way down on their list.'"

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Good. (0, Troll)

zieroh (307208) | about 2 years ago | (#41952387)

Good.

Re:Good. (0)

Anonymous Coward | about 2 years ago | (#41952405)

Care to elaborate, or should we just dismiss you as a troll outright?

Re:Good. (-1)

Anonymous Coward | about 2 years ago | (#41952449)

trolling trolling trolling, keep them posts a trolling. COWARD!

Re:Good. (-1, Troll)

fustakrakich (1673220) | about 2 years ago | (#41952457)

Those piles of cash the corps are sitting on is the bailout money that was handed out by the government. We wouldn't want it to get in the wrong hands now, would we? We gotta keep the squeeze on to reduce expectations. You can't justify all the coming austerity measures if the economy is all flush with cash. Abundance is poison...

Re:Good. (1)

amiga3D (567632) | about 2 years ago | (#41952499)

Really? Someone told me that was all being paid back.

Re:Good. (3, Insightful)

Anonymous Coward | about 2 years ago | (#41952525)

Those piles of cash the corps are sitting on is the bailout money that was handed out by the government. We wouldn't want it to get in the wrong hands now, would we? We gotta keep the squeeze on to reduce expectations. You can't justify all the coming austerity measures if the economy is all flush with cash. Abundance is poison...

Where are the '-1 outright lie' or '-1 willful ignorance' mods when you need them?

Re:Good. (0)

Anonymous Coward | about 2 years ago | (#41952803)

'Score:0, Troll'? Bollocks. Mod parent up.

Re:Good. (1)

zieroh (307208) | about 2 years ago | (#41952465)

Not trolling. Just expressing the opinion that vulture capital money does more harm than good in Silicon Valley.

Re:Good. (1)

Anonymous Coward | about 2 years ago | (#41952865)

You seem confused, bro. Vulture capitalism is a derogatory term for the private equity industry, not the venture capital industry.

Re:Good. (0)

Anonymous Coward | about 2 years ago | (#41952963)

In what way is venture capitalism not also [vulture] capitalism?

Re:Good. (1)

amiga3D (567632) | about 2 years ago | (#41952447)

Only if all your money is invested in gold. I'm moving my money in my 401K to the government securities fund so I wont make any return but at least I may not lose all of it.

Re:Good. (0)

pla (258480) | about 2 years ago | (#41952547)

I'm moving my money in my 401K to the government securities fund so I wont make any return but at least I may not lose all of it.

At least, not until January 1st...

Anyone know of a practical way to invest your money in ammo (as a commodity, not a manufacturer thereof)?

Re:Good. (0)

Anonymous Coward | about 2 years ago | (#41952609)

Buy gold bullets?

Re:Good. (2, Funny)

Anonymous Coward | about 2 years ago | (#41952729)

I buy silver. I've actually accumulated enough now where it's hard to lug around. It's cheaper, and works on werewolves.

Re:Good. (2)

ExploHD (888637) | about 2 years ago | (#41952651)

The going over the fiscal cliff and the hitting the debt ceiling are two separate things. We won't hit the debt ceiling until at least mid January...

Re:Good. (3, Insightful)

Anonymous Coward | about 2 years ago | (#41952739)

The going over the fiscal cliff and the hitting the debt ceiling are two separate things. We won't hit the debt ceiling until at least mid January...

But both are manufactured financial crisis designed to panic the public into accepting policies that are not in their best interests.

Re:Good. (2)

ExploHD (888637) | about 2 years ago | (#41952861)

and you are correct [marketplace.org] ...

Re:Good. (0)

Anonymous Coward | about 2 years ago | (#41952899)

What happens January 1st?, Bubba?

Re:Good. (0)

Anonymous Coward | about 2 years ago | (#41952469)

Nothing good about VC's not wanting to spend money, that's a bad sign. VC's spend money where banks won't for startups that may be shaky, but still have a chance of launching a good and reliable product. About 10% of the money I had pre-election went into VC holdings. I pulled all my money out of the US market and changed it to asian/canadian fully the day after Obama won. I was actually rather surprised when I got a call from my brokerage who had gotten a call from the two US VC's that I had invested in begging me not to pull my money.

To me, it's not the global economy. VC's are on a roll here in Canada, and in other parts of the world, though not in Europe so much or the US. Too much shit, too much uncertainty, too much instability. I'm still making money, though for the last 2 years the US was my worst performer, with the EU following. Despite what people think that VC's only blow money on crap, and they do. They look to make money anywhere they can. They do find the occasional golden nugget. And lets be honest, if you were sitting on a pile of cash and the first words post election were "hey we're raizin' taxes bitches" the first thing I'd do is sit on it harder, and look at cutting people.

Re:Good. (3, Insightful)

zieroh (307208) | about 2 years ago | (#41952513)

It's a great sign. VC money distorts reality in Silicon Valley. I've lived here for 20-odd years, and VC money is at the root of nearly every problem Silicon Valley has.

Re:Good. (0)

Anonymous Coward | about 2 years ago | (#41952539)

You're not very smart are you? Or maybe just blinded by ideology...but just answer this? When did investments have better returns? Clinton or Bush?

But without suckers like you around to buy my shit when some incompetent Republican crook gets into office I might get stuck holding the bag! lmfao ....

Re:Good. (0)

sjames (1099) | about 2 years ago | (#41952603)

Yeah, because taxes are SOOOOOooo much lower in Canada and the EU than in the U.S.

He said asia/canada (5, Insightful)

codegen (103601) | about 2 years ago | (#41952653)

He said Asia/canada not EU. It is true that taxes are higher than in the US. But the overal cost is lower. Before coming back to Academia, I was part of a startup. With the health care support we have in Canada, as well as other benefits, the lower loaded cost of an employee about makes up for the taxes. He also said undertainty. A higher tax rate isn't what kills it, as Warren Buffet has pointed out time and again. Its the endless bickering and inability to settle on a solution that kills it. If the GOP in the house is willing to meet Obama part way, then the situation will improve.

Re:He said asia/canada (0)

Anonymous Coward | about 2 years ago | (#41952801)

If the GOP in the house is willing to meet Obama part way, then the situation will improve.

I wish I could be in the Washington when that happens, there are few sights that can beat watching a flock of pigs fly over the capitol building and getting shot down by a flight of F-22s.

Re:Good. (1)

Mashiki (184564) | about 2 years ago | (#41952945)

Yeah, because taxes are SOOOOOooo much lower in Canada and the EU than in the U.S.

Well...actually, yeah in parts of Canada they are. And if the $7b in taxes goes through at the start of next year happen, I'm sure those of us up in Canada will see American companies flocking to Canada.

Re:Good. (1)

JustOK (667959) | about 2 years ago | (#41952655)

Yah, Canada is a good investment, n'est pas?

Oh no (5, Insightful)

Anonymous Coward | about 2 years ago | (#41952401)

Investors may have to make their returns by the companies they invest in making successful products that people want to buy. Disaster.

Re:Oh no (2, Insightful)

amiga3D (567632) | about 2 years ago | (#41952429)

Stupid, you can't read, can you? They aren't investing in anything. The investors are sitting on their money because the economy is so fucked they think they'll lose it on any risk. This causes the economy to stagnate with no jobs created and no revenue to enable the government to pay it's debts or even to meet it's obligations meaning it borrows even more money. Right now we're going down the hole at 100 billion dollars a month and no sign it's going to get better in the near term. It may not be a disaster but it is misery.

Re:Oh no (5, Insightful)

PPH (736903) | about 2 years ago | (#41952517)

Simple solution: Inflation.

Want to sit on a pile of cash? Fine. It won't be worth much come next year. Greece and Spain (and the US?) are too deep in debt? No problem. Pay your (fixed) obligations with tomorrow's devalued currency.

The problem is that the political landscape is being manipulated by people who have tons of cash and demand a risk-free guaranteed ROI. That's what caused the whole mortgage crisis. People with money went to Congress and then Goldman Sachs demanding some sort of paper that had zero risk and paid big interest. And Goldman's Morlocks went to work creating them for all the rich folks upstairs. But then someone blew the horn.

Sorry. No more free lunch. With return comes risk. Don't like it? Buy a mattress.

Re:Oh no (4, Insightful)

amiga3D (567632) | about 2 years ago | (#41952541)

I don't think they mind risk so much, it's certain doom they can't abide.

Re:Oh no (1)

tacokill (531275) | about 2 years ago | (#41952635)

The solution is inflation? Scuse me but wtf are you smoking? Inflation screws everyone. Especially the poor and working poor.

Re:Oh no (1)

russotto (537200) | about 2 years ago | (#41952779)

The solution is inflation? Scuse me but wtf are you smoking? Inflation screws everyone. Especially the poor and working poor.

Just about everything screws the poor the most. Even when you set out to screw the rich, the poor take it on the chin. The very last issue of the New York Times will read "World to End At Midnight. Poor and Minorities hardest hit."

Re:Oh no (5, Insightful)

tacokill (531275) | about 2 years ago | (#41952799)

Yes but inflation is different. The upper classes own assets. Asset values can move up and down during inflation. ie: see gold.

The poor hold money - dollars. Those only go one direction during inflation: down.

Re:Oh no (1, Insightful)

approachingZero (1365381) | about 2 years ago | (#41953029)

Maybe somebody should have explained this to the poor before they voted for Obama. To bad, guess they'll learn the hard way.

Re:Oh no (1)

DigiShaman (671371) | about 2 years ago | (#41952807)

No, it screws the middle class who have been saving up money to buy a house, yet doesn't have enough established credit to take a large loan.

The poor will just float it as minimum wage will be in constant change to keep up with inflation.

Re:Oh no (1)

jcdr (178250) | about 2 years ago | (#41952839)

Is there any solution to have more inflation affecting the pile of cash than the poor and working poor ?

Re:Oh no (0)

Anonymous Coward | about 2 years ago | (#41952873)

Huh? Inflation screws people with SAVINGS and people on a fixed income. The poor and working poor are drowning in debt--inflation causes them to owe LESS in real dollars.

Re:Oh no (1)

Impy the Impiuos Imp (442658) | about 2 years ago | (#41952709)

Yes, that'll restore confidence -- promose to take the value if they don't spend it, let failure take it if they do invest and lose, and if they invest and win, which they judge unlikely at this point already, have politicians pluck down a much larger chunk of the profits, declaring buisness evil for not paying their fair share; they have a greater ability, and duty, to pay.

Until moral improves, the beatings will continue. Here's your new program to find people hiding in the closets who want nothing to do with your beatings.

Nice.

Re:Oh no (1)

fustakrakich (1673220) | about 2 years ago | (#41952537)

The investors are sitting on their money because the economy is so fucked they think they'll lose it on any risk.

They're the ones who fucked it up and made a tidy profit from it. We shouldn't expect them to just give all back. Heaven forbid they should risk their ill gotten gains.

Re:Oh no (1)

amiga3D (567632) | about 2 years ago | (#41952581)

Well that works well for the handful of stinking rich fuckers out there. Unfortunately the biggest chunk of that capital is in investment funds made up of people's 401K and IRA retirement funds. Good stewards in charge of these funds hesitate to throw the money away as working people count on this money to enable them to buy food and pay their electric bills after they retire. I don't know if you have any such money set aside but I have almost a quarter of a million dollars in my 401K representing over 30 years of hard work and sacrifice and if someone flippantly threw it down a hole it would perturb me somewhat.

Re:Oh no (1)

fustakrakich (1673220) | about 2 years ago | (#41952649)

Unfortunately the biggest chunk of that capital is in investment funds made up of people's 401K and IRA retirement funds.

And most of that is buried in the derivatives market. That's the hole your 401K is being thrown into, a true gamble, if there ever was one, and it won't take 30 years for it to disappear.

Re:Oh no (1)

besalope (1186101) | about 2 years ago | (#41952773)

Unfortunately the biggest chunk of that capital is in investment funds made up of people's 401K and IRA retirement funds.

And most of that is buried in the derivatives market. That's the hole your 401K is being thrown into, a true gamble, if there ever was one, and it won't take 30 years for it to disappear.

I believe the GP meant it took 30 years of hard work and sacrifice to save up to that quarter of a million dollars, not that it would take 30 years to spend it.

Re:Oh no (1, Insightful)

BlueStrat (756137) | about 2 years ago | (#41952711)

Investors may have to make their returns by the companies they invest in making successful products that people want to buy. Disaster.

Stupid, you can't read, can you? They aren't investing in anything. The investors are sitting on their money because the economy is so fucked they think they'll lose it on any risk. This causes the economy to stagnate with no jobs created and no revenue to enable the government to pay it's debts or even to meet it's obligations meaning it borrows even more money. Right now we're going down the hole at 100 billion dollars a month and no sign it's going to get better in the near term. It may not be a disaster but it is misery.

I agree with everything you've stated and I understand your frustration at such ignorance, but you're almost certainly wasting your breath. AC is likely a product of the US public school and university system which hasn't taught students how to think for decades, instead simply teaching what to think. They are simply unequipped to comprehend what you are saying.

Sadly, this means that your efforts to inform and enlighten many here are much akin to trying to teach a dog to solve advanced differential equations; A frustrating waste of time for you, and annoying as hell for the dog.

I do love the schadenfreude in that many here who are being negatively affected voted to reelect the guy who promised as part of his campaign and who just announced he would not sign any budget or tax legislation that doesn't raise taxes on businesses and "the rich", which just throws gasoline on the economic Dresden.

Strat

Re:Oh no (5, Insightful)

hey! (33014) | about 2 years ago | (#41953015)

And the words "fiscal cliff" has nothing to do with this?

The problem is that they're expecting a renewed recession when taxes go up and government spending goes down. The government will be taking more money out of the economy and putting less into it.

Anybody as freaked out by current government borrowing as you describe is simply being hysterical. Sure the deficit at a historical high in absolute terms, but its nowhere near a historical high as percent of GDP. On top of that the government is currently borrowing money at or below the rate of inflation. It'd be insane not to borrow when people are in effect *paying* us to hold onto it for them. Check out the recent ten year treasury rate [ycharts.com] and compare it to inflation [usinflatio...ulator.com] .

No business would worry about borrowing money at an interest rate below what it can earn by holding onto the cash it already has. That's why *every* large business borrows money, even when it's profitable. It's counter-intuitive if you think of business and government budgeting like they were normal household budgeting, but business and governments aren't like typical private households. Even wealthy *individuals* borrow money when the interest rates are favorable. I once had a wealthy young trust fund kid working for me who borrowed money from the bank to buy a yacht. It made no sense for him to liquidate his investments when those investments earned more than the bank's interest rate.

There's a time to worry about government borrowing, and that's in a full economy where dollars in the private sector are creating jobs like crazy. Nobody seems to worry about austerity then, when interest rates are high, but they should. But when interest rates are low, suddenly people freak out about borrowing money. It's hysterical fear, that's all.

Re:Oh no (1, Informative)

Anonymous Coward | about 2 years ago | (#41952875)

Good friend of mine had $30 M lined up to start production on light aircraft. Given the tax the rich election, thats not happening. I cant blame the investor, but its 80 jobs that didnt happen due to economic (un)certainty.

Remarkably verbose article (2)

vlm (69642) | about 2 years ago | (#41952415)

Remarkably verbose article. Somebody's getting paid by the word... The TLDR is: "much like the rest of the economy, the velocity of money is on the decline in the VC/startup field".

Alternate theory: (5, Insightful)

fuzzyfuzzyfungus (1223518) | about 2 years ago | (#41952435)

Much of the VC activity(and startup acquisition by larger outfits) in the valley has been based on absurd speculative bullshit only slightly less risible than pets.com. Now, with the supply of bigger suckers on which to unload your worthless stock in some 'disruptive' Web2.0/mobile/social/bullshit apparently drying up a bit, non-idiots are staying away.

Good heavens, whatever shall we do?

Re:Alternate theory: (3, Insightful)

phantomfive (622387) | about 2 years ago | (#41952509)

It is unlikely that the supply of 'bigger suckers' is drying up, right now, at this moment 40,000 years since we evolved.

Re:Alternate theory: (3, Insightful)

fuzzyfuzzyfungus (1223518) | about 2 years ago | (#41952819)

It would probably be fairer to say that they are moving somewhere else, rather than drying up entirely.

From TFA ""Limited partners are getting fatigued from giving money to venture capital and getting back less than they give," said Tracy Lefteroff, global managing partner of the venture capital practice at PWC."

and

"Joe Dear, CalPERS' chief investment officer, told Reuters: "Venture has been the most disappointing asset class over the past 10 years as far as returns. ""

Suckers do sometimes catch on, eventually. This is unlikely to cure them in an absolute sense; but it makes it more likely that they will move to being suckers about some other flavor of asset.

The other thing that really gives me the 'yeah, it's a bubble that's starting to pop, go cry." feeling is the assertion that "So what's wrong with the VC industry? The problems are many and complex. But they can be boiled down to this: Not enough exits.".

You have an industry that is basically the tech-jockey equivalent of flipping houses with borrowed money. During the expansion phase of a bubble, that can work out rather well. At other times, you find yourself facing the tougher challenge of "actually producing houses people want to live in" and "living on the margins of a renovation contractor; because that's actually the only value you are adding".

The VC guys apparently aren't willing(or perhaps aren't capable) to build companies that actually make money, and earn their returns that way, and they apparently aren't capable of building companies attractive enough that firms with cash on hand would rather buy them out than just do it in house or do without. They've run out of suckers and apparently aren't good enough to cater to customers...

Re:Alternate theory: (1)

phantomfive (622387) | about 2 years ago | (#41952965)

I think you might have a point when you say this:

The other thing that really gives me the 'yeah, it's a bubble that's starting to pop, go cry." feeling is the assertion that "So what's wrong with the VC industry? The problems are many and complex. But they can be boiled down to this: Not enough exits.".

But I think you might go too far in your assertion that startups are useless (it sounds like are asserting that, anyway). Certainly the ones you find on "Start-Ups: Silicon Valley" are useless, but there are a lot of them that are good.

One thing's for sure though, this story has nothing to do with the 'fiscal cliff.'

Re:Alternate theory: (2)

fuzzyfuzzyfungus (1223518) | about 2 years ago | (#41953047)

I didn't intend to assert that startups are useless; just that if a VC can't make money by funding startups without a ready supply of 'exits', this suggests that the VC is doing a poor job of picking and cultivating startups that are either worth buying or capable of becoming profitable in their own right.

In theory, part of the value-add that a VC, rather than an ordinary loan, provides is some combination of expert judgement(so a good VC should theoretically be backing a better-than-average set of startups) and management/strategy/etc. guidance(so a startup with a good VC should theoretically be better off than an equivalent startup with a generic loan). If a VC can only perform well when the market is loaded with 'exits', and even lousy startups are managing to IPO or get sold, that suggests that they aren't actually any good at picking or building good startups.

(The other thing that makes me doubt the 'regulatory uncertainty' theory is this consideration: If I am a company sitting on a big pile of cash, and there is the possibility that inflation or heavier taxation might strike, wouldn't I be rushing to turn my dollars(which are likely to be devalued or easy prey for the tax man) into products and patents and similar things that are less likely to suffer inflation and are much easier to value creatively when the IRS comes calling?)

Re:Alternate theory: (0)

Anonymous Coward | about 2 years ago | (#41952601)

WEB 3.0!

Re:Alternate theory: (1)

Trepidity (597) | about 2 years ago | (#41952823)

Zynga's disastrous IPO certainly hasn't helped the tech-IPO market's prospects. Don't think you can blame that one on either Congress or Obama, either.

Re:Alternate theory: (1)

fuzzyfuzzyfungus (1223518) | about 2 years ago | (#41952831)

And Facebook was a smashing success, that certainly brightened the mood...

Plenty of mergers just not a lot of prime targets (2, Insightful)

Anonymous Coward | about 2 years ago | (#41952441)

Starwars was a merger long over due.
Netflix looks weak.
AMD is in the wings.
Just because google, apple, and microsoft aren't buying every month on doesnt mean a whole lot of fiscal uncertainty.
It just means there isn't a real motivation to swoop in before your competitors beat you to the punch.
It's good to take a break and take a breath in between spending 100 mil.
Seriously if you need a idea to throw your money at.. how about flying cars that drive themselves with solar energy that let me connect with my friends and tweet our international pub crawls while giving us discounts on our next bar in queue.
BTW how's groupons stock doing. Oh right it's only down 85% for the year.

Plenty of insulation, not a lot of prime targets (0)

Anonymous Coward | about 2 years ago | (#41952745)

The good thing about all that cash is it insulates from mistakes. Just ask Intel and Itanium, or Microsoft and the original Xbox. Maybe Sharp would still be with us, if they had done that, instead of investing in risky R&D.

well yeah.... (1)

GrimShady (2714901) | about 2 years ago | (#41952445)

I can not blame them. I would not consider investing until this economic shitstorm is sorted out. If you have money and you truly think things are going to get real crappy soon you would wait also.

You have better odds in vegas than with a random startup right now....

Re:well yeah.... (1)

fustakrakich (1673220) | about 2 years ago | (#41952565)

You have better odds in vegas...

You misspelled Wall Street, the cause of your economic 'shitstorm'.

Forget the fiscal cliff. (-1)

Anonymous Coward | about 2 years ago | (#41952451)

Investment has been down these last few years because of the very real fear of an attack on Iran causing WW3. What's worth investing in when you fear war is around the corner?

Re:Forget the fiscal cliff. (1)

amiga3D (567632) | about 2 years ago | (#41952461)

WW3? Iran? Heh, Whatever. War is good for investment, lots of money to be made. Unfortunately it's got to be paid for by the tax payers.

Re:Forget the fiscal cliff. (0)

Anonymous Coward | about 2 years ago | (#41952473)

Bro, WW3 with Iran would be the best thing that every happened for Tesla at least. Oil will go in to the stratosphere and and electric cars will look like a damn bargain!

Also, let's face it, half the "uncertainty" right now has nothing to do with America but with the Chinese transition of power and European debt mess.

Re:Forget the fiscal cliff. (1)

zieroh (307208) | about 2 years ago | (#41952579)

Citation needed. Provide one or shut the fuck up.

Decline (1, Funny)

Anonymous Coward | about 2 years ago | (#41952477)

you voted for it.

Re:Decline (2)

Impy the Impiuos Imp (442658) | about 2 years ago | (#41952771)

Funny, and troll both.

Does anyone else find it interesting, though, that there are serious posts talking about government punishing businesses for failing to invest in a risky environment, to rescue politicians from bad times?

How else to describe it?

Uncertainty? (1)

Fuzzums (250400) | about 2 years ago | (#41952481)

With all the uncertainty they're facing with the economy and taxes??
I don't get it. I was told there are two thing in life that are certain. Economy and taxes.
Or at least something like that ;)

Elections have consequences (0, Troll)

gelowe (2772271) | about 2 years ago | (#41952485)

Elections have consequences Do you blame them for holding on to thier cash reserves? With Obamacare looming and a president that has shown no understanding of how our current economic system works, these corporations can only predict that things will continue to worsen. They won't invest any of this money until there is some possibility that there will be a return. That probably won't happen in the next 4 years. Buckle up kiddies we are in for one hell of a bumpy ride.

GOP Needs to Understand (0, Troll)

EmagGeek (574360) | about 2 years ago | (#41952511)

This is the time for compromise.

Obama is willing to compromise, as long as he gets everything he wants.

The sooner they realize that, the sooner we can move on to truly punishing the evil, greedy corporations that got us into this mess by creating booming economies over the years in the first place. Had the concepts of capitalism and big business never created the most prosperous Nation in the first place, we would not be in this mess we're in.

Re:GOP Needs to Understand (0, Offtopic)

Mashiki (184564) | about 2 years ago | (#41952925)

Obama is willing to compromise, as long as he gets everything he wants.

That's not a compromise, that's a dictatorship. Sadly the ignorant masses who voted for "give me free stuff" believe it.

Re:GOP Needs to Understand (2)

phantomfive (622387) | about 2 years ago | (#41953001)

Obama is willing to compromise, as long as he gets everything he wants.

Do you realize this is the exact opposite of compromise?

You want certainty? (3, Insightful)

PPH (736903) | about 2 years ago | (#41952563)

Fine. We're certain that your tax rate will be going to 39.6% come January first and Greece won't be paying your bonds back.

Feel better? Now get to work.

Bad businesses (4, Insightful)

devleopard (317515) | about 2 years ago | (#41952589)

Too little innovation, too many apps like "Mobile photo sharing - FOR CATS!"

The funding game is dying, slowly. The future is in the 37 Signals and GitHubs of the world. (Both took funding I believe, but only after they were profitable : if the VC is how you keep the lights on, you're doing it wrong) Even more significant are the bootstrapped startups, the 1-4 person operations, that make great products that actually solve problems. (In other words, the anti-Instagram)

Re:Bad businesses (0)

Anonymous Coward | about 2 years ago | (#41952841)

That's my idea. I'm suing you for stealing my IPR.

Perhaps that's the real problem.

Re:Bad businesses (0)

Anonymous Coward | about 2 years ago | (#41952849)

I'm would like to invest in your photo sharing application!

How hard is it to proofread a paragraph. (1)

viper21 (16860) | about 2 years ago | (#41952607)

Rather THAN. Seriously.

Re:How hard is it to proofread a paragraph. (1)

Nidi62 (1525137) | about 2 years ago | (#41952751)

Could be worse. I just read a CNN story about a Vietnam Medal of Honor winner (posthumous of course). They couldn't even spell Khe Sahn correctly (spelled it Que Son). And that is one of the most famous battles of that war.

Re:How hard is it to proofread a paragraph. (0)

Anonymous Coward | about 2 years ago | (#41953065)

Could be worse. I just read a /. post about that couldn't even spell Khe Sanh correctly (spelled it Khe Sahn). And they were trying to make a point about proofreading.

they have tons of money and yet won't invest ? (2)

etash (1907284) | about 2 years ago | (#41952629)

Cleary they have to be wrong. GOP says that people with money will always invest their cash thus creating more jobs.

Who could have foreseen it? (1)

Anonymous Coward | about 2 years ago | (#41952633)

Our government (President and most of Congress) are not willing to implement austerity. The debt increases by over a trillion per year, and that's the plan! That's what the actual Obama administration numbers say the future holds, an extra trillion in debt per year. (Based on their assumptions, that trillion will decline down slowly starting in three or four years, but it would take a tiny uptick in the interest rates to wipe out that assumed decline and make it go up.) The unfunded mandates in the Affordable Care Act (a/k/a "Obamacare") fall squarely on business, so lots of businesses are laying off people... the unfunded mandates are a step function, and lots of businesses are firing until they drop down a step or two, and they plan to freeze their headcount forever to avoid the additional financial burden. Dodd/Frank is causing havoc, Sarbanes/Oxley isn't helping any either. There hasn't been a budget in four years, the credit rating of the USA has been downgraded and the credit agencies are broadly hinting that they are about to do it again. Obama has signaled clearly that tax rates are going up soon, and he has the political power to make that stick. Obama is floating a "carbon tax" to make all energy use more expensive as well.

In this environment, who could have foreseen a reluctance to take financial risks?

There is a startup hiring near me, and they look interesting. Instead I am clinging to my less-exciting but stable job. It isn't just investors who are worried.

Re:Who could have foreseen it? (3, Informative)

headhot (137860) | about 2 years ago | (#41952717)

Hows austerity working for England, or Europe in general?

http://www.businessinsider.com/chart-of-the-day-us-vs-uk-growth-2012-4 [businessinsider.com]

Re:Who could have foreseen it? (1)

Billly Gates (198444) | about 2 years ago | (#41953013)

Ok.

How is Greece doing? Austerity is a much better deal with 10% unemployment than 28% unemployment and sky high taxes. The US is heading into greece within a few years and if I were a betting man Obama himself will still be president when shit hits the fan if we do not do anything!

Tough, you MUST PAY YOUR BILLS! The fiscal cliff is not good enough we need 10x fiscal cliffs just to break even! We need massive tax hikes, no healthcare except for the most elderly in medicare and we need to cut our military by 1/2 and do that for a good decade.

Sorry, I highly doubt even if the economy fully recovered to the 1990s levels can we pay off this debt let alone break even in this spending.

Re:Who could have foreseen it? (0)

Anonymous Coward | about 2 years ago | (#41952763)

Tell me, how is austerity working in Europe?

Re:Who could have foreseen it? (0)

Anonymous Coward | about 2 years ago | (#41952797)

President and most of Congressmen also aren't willing to solve another problem: unconstitutional Federal Reserve.
Feds are printing money now, QEternity is full speed. This won't help either, only causes more and more inflation.
And all we hear on TV/NPR is "economy is stabilizing, this and that stock went up, housing is up".
And nobody is mentioning that dis-n-dat is up because the shitload of money is being injected.
Most of the public, the sheeple, isn't willing to listen/hear to this either.

Re:Who could have foreseen it? (0)

Anonymous Coward | about 2 years ago | (#41953005)

Our government (President and most of Congress) are not willing to implement austerity.

Good for them. Starvation is not the path to prosperity. Our nation should not be run by people who think like teenage girls.

The debt increases by over a trillion per year, and that's the plan! That's what the actual Obama administration numbers say the future holds, an extra trillion in debt per year. (Based on their assumptions, that trillion will decline down slowly starting in three or four years, but it would take a tiny uptick in the interest rates to wipe out that assumed decline and make it go up.)

You must be thinking of the Romney administration, as that was their plan too, and assumed the magic fairy dust of economic expansion to reverse it.

The unfunded mandates in the Affordable Care Act (a/k/a "Obamacare") fall squarely on business, so lots of businesses are laying off people... the unfunded mandates are a step function, and lots of businesses are firing until they drop down a step or two, and they plan to freeze their headcount forever to avoid the additional financial burden.

Goodness me, you mean we'd be better off if we took the question entirely away from business? Isn't that what everybody SANE wanted to do, but Republicans fought hard to prevent?

Dodd/Frank is causing havoc, Sarbanes/Oxley isn't helping any either.

And lack would work better?

There hasn't been a budget in four years, the credit rating of the USA has been downgraded and the credit agencies are broadly hinting that they are about to do it again.

There have been budgets. Congress has been passing spending bills. They don't call them budgets, but they are, and the credit rating downgrade? Came to nothing more than posturing form unreliable credit agencies that were more upset at Republican posturing than anything else.

Obama has signaled clearly that tax rates are going up soon, and he has the political power to make that stick.

Let's hope so. Then we'll see the deficit go down.

Obama is floating a "carbon tax" to make all energy use more expensive as well.

Yeah, because pollution control isn't worth more than letting some guys burn energy all they want!

In this environment, who could have foreseen a reluctance to take financial risks?

There is a startup hiring near me, and they look interesting. Instead I am clinging to my less-exciting but stable job. It isn't just investors who are worried.

You know what's keeping me from leaving a job to take a risk? Health care.

Patents (1)

Anonymous Coward | about 2 years ago | (#41952713)

The reason why startups can't grow big.

Wait until the end of Obama II (0)

alexmin (938677) | about 2 years ago | (#41952737)

By that time US will accumulate another $4-6T of debt which will put total at about 130% GDP. There is no way to 'grow economy" out of that much debt so market for US goverment securities will cease (both federal and state/municipal.) At that point politicians will have only three options left: 1) _drastically_ cut welfare entitlements; 2) print more money; 3) all of the above. I bet on option 3, which means Inflations (capitalized on purpose.)

At this point hoarding money will become a losing proposition big time.

Re:Wait until the end of Obama II (1)

Dan667 (564390) | about 2 years ago | (#41952759)

so you would support an end to corporate welfare. The US cannot afford it, especially giving it to companies having record profits each year.

Re:Wait until the end of Obama II (0)

Anonymous Coward | about 2 years ago | (#41952833)

What will cutting welfare achieve except for distress and severe, violent turmoil? You can't toss people into jobs that are not there. Your 'feckless welfare queen' fantasy is just that: a fantasy.

Re:Wait until the end of Obama II (1)

alexmin (938677) | about 2 years ago | (#41952953)

Looks like you still do not get it. The cuts will not be "for a reason". Simply, there will be no money. I know, it's hard to imagine US government being out of money but this happened to many "great countries" of the past. Just ask Germans, or Russians, or Brits.
I have lived through one of those moments. You apparently did not. There is no "reason", or "cause", or "justice". At that point it's only about "surviving". It's not pretty. Until then enjoy your ivory tower.

Re:Wait until the end of Obama II (0)

Anonymous Coward | about 2 years ago | (#41953043)

'Surviving' by cutting of the lifeline of millions and also further depressing the economy: not a thing that is done.

Re:Wait until the end of Obama II (1)

alexmin (938677) | about 2 years ago | (#41953081)

As I wrote above: it's not pretty. Especially sucks to be one of those whose lifeline is cut. Falling from the window is not pretty either. Try legislate law of gravity away.

Re:Wait until the end of Obama II (0)

Anonymous Coward | about 2 years ago | (#41953091)

You apparently believe in magic. The money is gone, and we have a legion of people who believe they "deserve" instead of earned. Ive stopped investing in healthcare, and if the new congress performs as expected, will stop investing in the US.

financial cliff, but US has 11 aircraft carriers (4, Insightful)

Dan667 (564390) | about 2 years ago | (#41952755)

and is building a 12th. The are also a very long list of unneeded military weapon systems that are still funded and rampant corporate welfare. When conservatives want to talk about real fiscal responsibility and not just making the really rich richer than they might be able to say the words "financial cliff" without me laughing at their pure greed.

Re:financial cliff, but US has 11 aircraft carrier (-1, Troll)

Anonymous Coward | about 2 years ago | (#41952939)

Welfare spending hit $1 Trillion a year this year. The military spending is now peanuts compared to welfare. Add SS and Medicare and military spending is barely visible. But thanks for trolling with your pet issue that has no relevance to the topic at hand.

Re:financial cliff, but US has 11 aircraft carrier (0, Informative)

Anonymous Coward | about 2 years ago | (#41952989)

Since we could cut the entirety of the U.S. military budget and still be running close to a trillion dollar deficit, your focus on only one aspect of the financial picture seems pretty stupid. Just sayin'.

Taking stock of /. (1)

Ostracus (1354233) | about 2 years ago | (#41952757)

Amid Fiscal Uncertainty Venture Capital Is Way Down In Silicon Valley

Ummm, is this a good time to invest in Slashdot? :)

The plan has failed (1)

cvtan (752695) | about 2 years ago | (#41952795)

Maybe since the hoard-cash-and-don't-make-jobs-so-Obama-loses plan didn't work out, they should just buy big TVs and a couple of kegs and just live it up.

Bullshit (5, Insightful)

PopeRatzo (965947) | about 2 years ago | (#41952881)

This is nothing but FUD.

"Fiscal uncertainty" isn't going to dissuade anyone from making a buck if it can be made.

And in real terms, in real, honest-to-god terms of providing good lives and good jobs for people right here in this country, I'm not all that sure that "venture capital" really means all that much. Oh, it means a lot to those who have it, and for a few minutes it means something to a handful of their pals, but if there is going to be a resurgence of innovation and growth in this country, it's not going to come from "venture capital". Because, as I said, if there's a buck to be made, even if taxes are high, people will line up to get it, regardless of the tax rates. Remember, this whole thing is over whether or not we're going to go back to the tax rates we had during the Clinton administration when everybody was making money.

There was venture capital in every hot and cold tap during the 90s, and all we got was this lousy popped bubble.

Real federal tax rates have never been lower for "venture capital". Is paying 14% really so onerous?

The whole "John Galt" story shows just how incapable of self-examination our economic elite have become. The notion that if the captains of industry are so important - such unique snowflakes - that if they were to disappear there wouldn't be a line of people ready and able to jump into that spot is such an example of ego run amok. But we already knew the egos of our financial elite have reached escape velocity that they believe they are worth yearly incomes of over 1000 times what the average worker is worth. What kind of self-regard does it take for someone to believe that?

Let's see how well their little tantrum works out for them.

Their money has already been on the sidelines. I'm guessing that we're in better shape to do without them than they are to do without us. Fuck 'em.

Silver lining (1)

PopeRatzo (965947) | about 2 years ago | (#41952903)

The more I read the article and follow the links, the more I think that having the Silicon Valley venture capital boys clutching their pearls and running to the fainting couches might be a really good thing for our country.

Romney's cronies are crying (0)

Anonymous Coward | about 2 years ago | (#41952933)

Romney's cronies in the VC industry are still crying.

But no worries, they will sober up from their hangovers of 25 year old scotch and Rémy Martin Louis XIII.

Newsflash (0)

Anonymous Coward | about 2 years ago | (#41952967)

Venture insiders blame the global economic uncertainty. They believe that is part of the reason that giant corporations, which have amassed huge piles of cash, are just sitting on it,

Newsflash: Rich people suddenly realize that rich people are the problem.

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