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June 5, 2012 12:05 pm GMT

An Extremely Rational Bubble

Screen Shot 2012-06-05 at 1.01.25 AMIt just makes sense that the failure of Facebook to spectacularly IPO would affect all markets public and private right? But especially the companies, public or private, that are contingent upon, tethered to, Facebook … like well Zynga, and Quora and Fab and most social Consumer Internet startups really. So, as someone who had no idea what money she has and where it is invested, please don’t pay attention any financial advice I may have … I clearly have no idea what I’m talking about. BUT (big ‘but’) … We just had Paul Graham write an emailthat many have already deemed to be “RIP Good Times” part deux to his portfolio companies. And you should pay attention, because who’s smarter than Paul right? No one that I know of. But (smaller ‘but’), all is not lost, as I’ve spent all day chasing down the fact that companies who are real businesses stand to benefit from the current expected suppression in private market funding, if (caveat) they are actually a business. And, because of a standard lag time in perception, if you are raising funding and still haven’t figured everything out, you still have about six months to raise all you can. Investors have been holding cash waiting for valuations to go down apparently. So yeah, fyi. And yes, were not in a bubble, we’re actually in some sort of meta-bubble where our extreme concern about being in a bubble actually prevents us from being in a bubble. It’s bubbleception. Enjoy. And, for some perspective: I for one am really grateful to even have a job in this shit, because half the people my age in my home country of Greece don’t. And that is the whole problem right there (Greece is more of a worry for both public and private investors than Facebook I’m hearing). FFS someone smarter than me fix this. Graham’s entire email below. Jessica and I had dinner recently with a prominent investor. He seemed sure the bad performance of the Facebook IPO will hurt the funding market for earlier stage startups. But no one knows yet how much. Possibly only a little. Possibly a lot, if it becomes a vicious circle.What does this mean for you? If it means new startups raise their first money on worse terms than they would have a few months ago, that’s not the end of the world, because by historical

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