[superfrank]

Super simple EIL5:

Rates are low: I can borrow money at 1% interest and my bank pays me 0.1% interest on any money I leave in my account. I'm getting basically no return on my money in the bank, so it makes sense to start a project that might make me money. If I have to borrow money, I only need to make a 1% return for it to be worth it.

Rates are high: It now costs 7% to borrow money and my bank pays me 4% on any money I leave in my account. 4% is a decent return and if I borrow money I need need a project that returns >7% for it to be worth it. Leaving my money in the bank seems like a much better option now.

How this applies to Reddit: VCs and investors are trying to figure out which projects are worth putting more money into, but the bar to make an investment worth it is much higher. Reddit (and many other companies) now need to show that giving them money is more profitable than leaving money in the bank (or other "safe" investments).