Hacker News Reader

Interest rates have many 2nd order effects, including VCs getting more funding from their LPs, and future-looking stocks becoming a more appealing investment class. Its not just about loans.

I believe the idea is not that companies were being funded by loans. It's that investors couldn't get a return on savings, so all the money they would normally have in saving like deposits was invested elsewhere, into the VCs for example.

1. Where did VCs get the capital to fund those small to medium companies?

2. What does ZIRP do to stock appreciation? Does it tend to suppress it or enhance it?

3. What massive profits?

Many VCs get money from LPs who play different kinds of leverage games with various time horizons.