Why Interest Rates Affect PE Ratios

Interest rates at zero have fueled a massive expansion of venture capital in technology invested, right? So the story of technology has been just build something you can worry about revenue later. But now we're in an environment where the discount rate is 4 to 4.5% and suddenly those valuations are compressing quite rapidly and massively. In like one in five companies in the United States was a zombie company. And I think that's going to be a positive change but it's going to look very different by 2018.

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