I'd agree that an incubator bubble isn't a scary bubble, but for different reasons.
In slightly oversimplified economics, bubbles are bad because they mis-direct investment from productive areas to the unproductive but bubbling area of the economy.
The result is too much of something (ex. houses) and the inevitable crash almost always result in a shortage of funds (ex. a credit crisis). Thus the bubble hurts the rest of the economy in two ways. 1. Creates too much of something which which is not needed. 2. Deprives productive business of funding, by both sucking it up and later possibly causing a financial panic.
I can not think of how an incubator bubble can do those things.Can you have too much seed investment in startups? It's like throwing money at the ceiling, but so what? How's that so different from what angel investors do now? Is there any angel who has a long term track record of guessing better than random chance? Yes, pg and company are great, but that's not because they just guess, they also provide huge support after they pick a startup, imho that's where 50% if not more of the magic is.
And what would a bursting of the incubator bubble result in? A credit crisis? I can't imagine that. Incubators would have to become a HUGE part of the economy, I can not imagine this.
And if a collapse in incubators leads to a lack of funding, well its like the valley of death after the .COM 1.0 bubble burst. How many great companies came out of the aftermath of that? Tons!
In slightly oversimplified economics, bubbles are bad because they mis-direct investment from productive areas to the unproductive but bubbling area of the economy.
The result is too much of something (ex. houses) and the inevitable crash almost always result in a shortage of funds (ex. a credit crisis). Thus the bubble hurts the rest of the economy in two ways. 1. Creates too much of something which which is not needed. 2. Deprives productive business of funding, by both sucking it up and later possibly causing a financial panic.
I can not think of how an incubator bubble can do those things.Can you have too much seed investment in startups? It's like throwing money at the ceiling, but so what? How's that so different from what angel investors do now? Is there any angel who has a long term track record of guessing better than random chance? Yes, pg and company are great, but that's not because they just guess, they also provide huge support after they pick a startup, imho that's where 50% if not more of the magic is.
And what would a bursting of the incubator bubble result in? A credit crisis? I can't imagine that. Incubators would have to become a HUGE part of the economy, I can not imagine this.
And if a collapse in incubators leads to a lack of funding, well its like the valley of death after the .COM 1.0 bubble burst. How many great companies came out of the aftermath of that? Tons!