Rising interest rates crushed technology valuations and had a chilling effect on Silicon Valley.
Stripe had to take a major haircut along with the rest of the industry as soaring inflation and rising interest rates, starting in 2022, pushed investors out of the riskiest assets, lifted borrowing costs and and forced startups to tighten their belts.
"Valuations are a product of interest rates," Collison said.
While many tech companies took a hit in 2022 and 2023, Collison said the rising interest rate environment succeeded in flushing out the "wackiest" startup ideas, leaving the best ones to get funded.
He pointed to an "overfunding" of marginally good ideas, and "zombie companies" taking too long to go bust.
Persons:
John Collison, Collison, Patrick, Elon, We're, Jerome Powell
Organizations:
CNBC, SpaceX, Wall Street Journal, Federal
Locations:
Silicon Valley