[HN Gopher] Silicon Valley investors build $300B cash pile in st...
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       Silicon Valley investors build $300B cash pile in startup funding
       crunch
        
       Author : belter
       Score  : 18 points
       Date   : 2024-01-30 20:15 UTC (2 hours ago)
        
 (HTM) web link (www.ft.com)
 (TXT) w3m dump (www.ft.com)
        
       | belter wrote:
       | https://archive.is/HTYBC
        
       | pedalpete wrote:
       | Doesn't there have to come a point where VCs either deploy the
       | capital they raised or close up shop?
       | 
       | I've been pondering this for the last few years when VCs were
       | sitting on huge amounts of capital, but saying "the market is
       | closed".
       | 
       | With the expectation that they deploy the majority of a fund
       | within the first 5 years, let's say a $100m fund would deploy
       | $20m/year.
       | 
       | They've sat out the last 2 years, so they now need to deploy the
       | money they have at a quicker rate.
       | 
       | Will this mean that they
       | 
       | a) push up the valuations of a few companies that all the VCs are
       | chasing (likely in the AI space)
       | 
       | b) spread smaller amounts of funding across more companies.
       | 
       | c) neither, and just continue to not deploy. If you don't deploy
       | the funds, will investors back your next fund?
        
       | Certhas wrote:
       | How about we tax it all away and invest in public
       | infrastructure...
        
         | scrollaway wrote:
         | This money is likely already taxed, albeit to a lower rate than
         | usual as most of it is coming from capital gains which caps out
         | at 20% in the USA.
         | 
         | Let's talk real numbers instead of wishy-washy platitudes.
         | 
         | Nov. 2023: https://home.treasury.gov/news/featured-
         | stories/infrastructu...
         | 
         | This page confirms a 1.2 TRILLION dollar investment into US
         | infrastructure. That's 4 times higher than even if you were to
         | take all that SV money at gunpoint and invest it into
         | infrastructure.
         | 
         | I don't want to defend the "cash pile". The crunch is real, and
         | it sucks, but unless it is hoarded for years to come, it still
         | moves a hell of a lot faster than public money, on much lower
         | numbers overall. And innovation money (which a lot of this cash
         | pile would go towards) tends to benefit the entire world, not
         | just the US.
         | 
         | I don't see how your magic-wand suggestion would benefit anyone
         | any faster, honestly.
        
         | kcsavvy wrote:
         | I think it would be unwise to tax away a financial ecosystem
         | that has driven innovation for the world and funded one of the
         | nation's largest growth industries in exchange for marginally
         | increasing infrastructure spending.
        
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       (page generated 2024-01-30 23:01 UTC)