Pension funds, endowments, high-net-worth individuals and the like are also trying to figure out how to invest all their money — and along with places like the Bakken and a few emerging markets, Palo Alto seems awfully appealing. A few million in seed funding might turn to billions in an acquisition in just a few years, after all. “Valuations are at extreme levels because you cannot get a decent return on your money doing anything else,” Fred Wilson of Union Square Ventures wrote on his blog. “It’s been a good time to be in the V.C. and start-up business, and I think it will continue to be as long as the global economy is weak and rates are low.” In other words, the perks-laden, savior-and-ninja-saturated, TED-talking beast that has seemingly taken over Northern California in recent years might be a byproduct of high corporate profits and Fed policy as much as anything else.

But what happens if and when the normal patterns of the economy reassert themselves? What happens when the easy money gets a bit harder to come by, and firms suddenly need the companies they invest in to turn a profit? I put that question to half a dozen academics and businesspeople, and the general response was a shrug.

If it is a bubble, one thing that sets it apart is its relative dearth of retail investors. The dot-com bubble of the late 1990s and the economic collapse of 2008 still loom large, for investors and executives alike. “In the 1990s, as time went on, skeptics started to see Porsches in their neighbors’ driveways,” said Lise Buyer of the Class V Group, a consultancy for firms looking to go public. “Time beat back the skepticism.” It resulted in a disaster on the Nasdaq and the end of the Clinton boom. But now, she said, there is fresh memory of how badly things can go, and how quickly. For evidence, she pointed to the fact that 10 of the 19 technology companies that went public this year are trading below their offering price. “That isn’t the kind of performance that drives most folks to bet the mortgage money on the next hot wonder company,” she said. “Sanity prevails.”

What about those start-ups raising mountains of cash from investors? The queasy truth is that many of those investors could afford to lose it all. Technology giants — Apple, Facebook and Google, among many others — are raking in cash. They might be overpaying for acquisitions, but there is no reason to think that should damn their bottom lines in the long term. The same goes for the rich individuals funneling money to young companies through venture-capital firms and other vehicles.


deyoungmuseum:

Happy birthday, Richard Diebenkorn! Seawall, Diebenkorn’s seminal landscape from 1957, seamlessly integrates representation with the formal properties of Abstract Expressionism. Get lost in the artist’s raw, gestural brushwork by zooming in on the Google Art Project’s gigapixel scan of the painting.Want to learn more about the art of Richard Diebenkorn as it pertains to space? Check out this archived Google Art Talk on the subject, which includes further discussion of Seawall.
Richard Diebenkorn (American, 1922–1993). Seawall, 1957. Oil on canvas. Gift of Phyllis G. Diebenkorn. 1995.96

deyoungmuseum:

Happy birthday, Richard Diebenkorn! Seawall, Diebenkorn’s seminal landscape from 1957, seamlessly integrates representation with the formal properties of Abstract Expressionism. Get lost in the artist’s raw, gestural brushwork by zooming in on the Google Art Project’s gigapixel scan of the painting.

Want to learn more about the art of Richard Diebenkorn as it pertains to space? Check out this archived Google Art Talk on the subject, which includes further discussion of Seawall.

Richard Diebenkorn (American, 1922–1993). Seawall, 1957. Oil on canvas. Gift of Phyllis G. Diebenkorn. 1995.96