Hacker News new | ask | show | jobs
by matheusmoreira 971 days ago
> Maybe this time is different with higher interest rates?

Absolutely. Startups are a low interest rate phenomenon. With high interest rates, investors become a lot more selective. Fewer reasons to risk money on startups when the government is paying out a nice return. The higher the interest, the harder it is to get credit, therefore there'll be less money circulating which puts the brakes on inflation but also slows down the economy given that easy credit is one of the drivers of exponential growth.
1 comments
ohthatsnotright 971 days ago
Startups are not a low interest rate phenomenon. I bet the average small business would be considered a startup in terms of revenue, potential growth and employee headcount.

What is a low interest rate phenomenon is the unicorn growth strategy and dump trucks full of cash going in to stupid businesses that don't really have a path toward solvency but have really nice marketing.

link
matheusmoreira 971 days ago
> the average small business

Will also be impacted due to higher interest rates on their credit lines. Perhaps not as much but still.

> dump trucks full of cash going in to stupid businesses that don't really have a path toward solvency but have really nice marketing

That's what I meant by startups though. Startups that aren't doing that are just regular small businesses.

link