Interest Rates, Unicorns And What The Fed Means To Silicon Valley

Interest Rates, Unicorns And What The Fed Means To Silicon Valley

Most citizens of Silicon Valley see the drama around the Fed’s activities as only marginally relevant to innovation and entrepreneurship.

But three big macroeconomic forces have supported, if not driven, the extraordinary growth of Silicon Valley startups over the past several years, and changes in these forces could have a dramatic impact on Silicon Valley and other startup hubs.

Of course, macroeconomic trends have always had an impact on startup fundraising and venture capital investment. Interest rates, commodity prices, currency rates, and regional economic growth rates are all relevant to the investment climate. But lately Silicon Valley has seemed insulated from this reality. If you joined the startup world in the past five years, you might think that the explosion of new companies, new venture funds, and new unicorns is just the natural order of things.

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