[Market Trends] What Is ZIRP And How Did It Poison Startups? | Y Combinator
๐ The Perils of Easy Money: Unpacking ZIRP's Impact on Startups
This YouTube video features a discussion about ZIRP (Zero Interest Rate Phenomenon) and its impact on the startup ecosystem. The speakers, Dalton and Michael, explore how the near-zero interest rates established by the Federal Reserve during the period that ended around the COVID-19 pandemic led to excessive capital flows into venture capital. They argue that this cheap capital made it too easy for startups to secure funding, which often inhibited genuine innovation and encouraged riskier investments. This influx of capital led to an unsustainable surge in startup valuations, eventually resulting in a distorted market that favored quantity over quality of investments.