The value of startups and QE
It's easy to get impressed by the superb solutions offered by innovative start-ups like Spotify, Magine, Klarna as well as less known alternatives. Valuation and company being two different things though. I have recently thought about what drives the constantly increased valuations. Could it be so that the driver of the last 30-40% of value aggregation is the quantitative easing made by the Fed? The QE programs have now crippled down from the bond market (10-11) to large caps (12), SMEs (Q1 13) and finally reached all types of start-ups including a drastic increase in value for the most merited ones. Once the ratio of bond-buying eases the effects will come in the reverse order meaning startup valuations first.