Guy Rolnik welcomes his fellow panelists of investors Howard Morgan (First Round Capital), Jason Schwartz (GSI Investments), David Hirsch (Metamorphic Ventures), David Tisch (BoxGroup) and Howard Morgan (First Round Capital).
"We are in the midst of the biggest bubble ever", Rolnik introduces the panel, "7 years of 0 real interest rates around the world."
David Hirsch first responds speaking for early stage investments. Because of low yield and fixed incomes there's a lot of capital on the sidelines. This has encouraged people to take more risks and invest at early stages.
Howard explains that if you are a small business we hardly deal with zero interest rates, but credit card rates.
Promises of Disruption
"15 years ago, there was a lot of talk about the internet disrupting the financial world, but then we had two huge financial crisis, banks in America are more than ever too big too fail, the fees for financial services like are still exuberantly high. When will you disrupt the financial world which is eating 10% of the GDP?" Rolnik asks.
Bitcoin as a crypto currency will disrupt the payment industry, Howard says. Crowdfunding is another new investment form which is basically based on transparency.
The panelists go on discussing if socially responsible investments will become a new trend.
Rolnik cites Thomas Piketty arguing that since compounding interest rates is such a powerful way to accumulate wealth, the return on investment is higher than the growth of economy, inequality is only going to grow.
The five giants
Looking at the tech world, a lot of successful start ups have been bought by five giants consolidating their monopoly. "What are they doing for the investment world?", Rolnik asks.
You don't invest in a company because you think it is going to be bought by Facebook. The acquisitions do not have a lot to do with early stage investment, David Tisch points out. We will see more acquisitions by other companies, too. Pinterest and Uber also started acquiring companies.
Developments in the investment world
The number of VC firms has shrunk. There is a lot of investment in early stages, but later rounds are getting tougher, Howard Morgan reviews.
Tisch thinks a new investment class will emerge investing in companies that are now turned down by VCs because they don't they can scale dramatically. It might be a dividend and not a return business.