I agree that the overall situation is pretty dire. In the grand scheme of things, the amount of money exposed in the tech startup bubble is pretty small -- and it's disproportionately from certain groups of people (wealthy tech startup veterans, Goldman Sachs clients). But California's counting on the tax revenue so it could catch a lot of others up in it as well. We shall see ...
Yeah, it probably doesn't count on them. But every last bit helps and remember that when the bubble pops even innocent tech companies will be affected, not only those with crazy valuations.
when the bubble pops even innocent tech companies will be affected
How so? How will the "bubble" pop? None of the companies in question (Groupon, Facebook, and Zynga) are public. How would a loss of investor confidence in those private companies take down all technology companies?
If you're referring to the Goldman investment in Facebook: even at $50 billion, Facebook's valuation is peanuts in contrast to the technology economy. You may someday see ex-Facebook employees out on the streets with resumes, and some angry investors, but certainly this does not at all resemble 2000, when nearly every mutual fund and private investor had a stake in profitless dot-com companies that imploded.
there are many ways they will be affected, to list a few:
- FB, Zynga etc. use a lot of technology infrastructure. When that growth ceases, a lot of hardware vendors, service etc co's will be affected
- when/if bubble pops, it will affect investor confidence - lower if any valuations for new start-ups in that space and less cash for existing companies
- even stricter regulatory scrutiny (SOX will be peanuts compared to legislations that will be introduced after this bubble pops)
