When companies stay private longer, private capital stays tied up for longer, decreasing public liquidity and keeping bad private investments afloat for longer. Part of the creative destruction of the dot com bust was the legion of badly performing companies that went public and were thoroughly rejected by public investors, offering an exit to later investors and employees. Right now badly performing companies can limp along tying up liquidity and locking up employee equity only to head to an eventual bankruptcy or bad IPO.

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throw0101c 9 hours ago | parent | next [-]

> Part of the creative destruction of the dot com bust was the legion of badly performing companies that went public and were thoroughly rejected by public investors, offering an exit to later investors and employees.

That's not how I remember it. I remember lots of publicly traded company shares being gobbled even though their business plans[1] were essentially:

1. Collect underpants

2. ?

3. Profit

"Going for marketshare" and not making a profit was still popular as recently as Uber/DoorDash/etc. Cisco still (AIUI) hasn't reached back to is DotCom peak.

Are the current multiples of many tech stocks sensible?

[1] https://en.wikipedia.org/wiki/Gnomes_(South_Park)

	▲	Karrot_Kream 9 hours ago \| parent [-]
		I'm having a hard time responding to someone who's using a South Park episode as a discussion point. Like how can I debate a point made by a show that makes content reacting to the popular perception of certain ideas? That's like 2 levels removed from the actual true details. Anyway the difference now is that those companies still exist they just take round after round of private investor capital and the employees are offered shares that will never be tradable. Were those businesses would go bankrupt in a few years before now they can take 5-10 years. Time value of money being a thing, your money will be locked up for longer in a bad investment than it would on the public markets.

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runako 8 hours ago | parent | prev [-]

> badly performing companies can limp along tying up liquidity and locking up employee equity

"Just raised a Series E/F/G/H/I" companies