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Why does the interest rate matter? Unless you have no cash on hand and are operating soley off debt??

PeterFBell a day ago | parent | next [-]

If you're venture based and were expecting another round sometime soon. With higher interest rates there were more compelling alternatives for LPs than to invest in Venture, causing a trickle down chilling of the fund raising environment for venture backed companies and requiring them to come up with accelerated plans to reach profitability - including cutting staff and optimizing for survival over growth.

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halfcat a day ago | parent | prev [-]

> Unless you have no cash on hand and are operating soley off debt??

Bingo

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nostrademons a day ago | parent [-]

My employer actually has roughly $100B of cash on hand.

The issue is that they're a publicly-traded company, with a fiduciary responsibility to shareholders. If they're investing in an internal product that will make back 1% of the money invested in it over the next couple years, but they could have been investing in Treasury Bills that make back 4.5%, they are committing financial malpractice and will be sued accordingly.

	▲	maeil 12 hours ago \| parent \| next [-]
		I'd have hoped someone at Google would know this is a myth. The idea that choosing a 1% strategic internal investment over a 4.5% T-bill constitutes actionable "financial malpractice" or a breach of fiduciary duty leading to successful lawsuits is incorrect. Courts recognize that running a business requires strategic choices and risk-taking, not just maximizing immediate, risk-free yield. A lawsuit would fail unless plaintiffs could show the decision was tainted by disloyalty, bad faith, or gross negligence in the decision-making process, none of which are implied by simply choosing a lower-yield strategic project. Hence why no one ever gets sued for this. It doesn't happen. It lives in the minds of HNers and Redditors to provide a very convenient excuse for their employers, or in general companies, making abhorrent decisions purely based on feels and short-term next-quarter profits/stock price, regardless of the negative externalities they inflict on soeciety.
	▲	nilamo 8 hours ago \| parent \| prev [-]
		If that were true, Research and Development couldn't exist.