- Platform firms spray the Seed market with high-cap call options, hoping to catch the rocket ships. - If a startup becomes a rocket ship, the Seed price matters much less than access to later rounds. - If it doesn't take off immediately, the high price will make it much harder to raise subsequent capital. - Series A activity falls, as overpriced startups are less able to experiment, pivot and test the market. - The survivors are mostly incremental products with high execution risk and little idiosyncratic risk. - The total real value of the startup world begins to fall, though the contraction is masked by overbidding. - More of the remaining value is concentrated in the portfolios of the platform firms, at inflated marks. - Performance is understood on a relative basis, so the platform firms still appear attractive to LPs. - Smaller firms are washed out of the market, victims of concentration and weaker risk appetite. - Liquidity falls, but exits get much larger which is twisted to claim the concentration is logical. - Large exits are substantially overvalued, and the companies virtually all flounder afterwards. - Innovation slows, fewer jobs are created, and less wealth is generated for pensions and retail investors. - "Tech" becomes associated with rent-seeking oligarchs rather than optimism and progress. <<< We are here. - Butlerian jihad / Luddite rebellion / Socialism.