Monday, October 08, 2007

Bubble, bubble

Further speculation and comment on possible bubbles in a couple of tech areas -
The Guardian worries about another dotcom bubble with VCs searching for the next Facebook or Myspace. There's particularly tutting over the apparent focus on very young entrepreneurs:
With millions of pounds once again being poured into companies run by young entrepreneurs, some experts are warning that too much emphasis on youth could help reinflate the dotcom bubble.
"People like Mark Zuckerberg [of Facebook] show that there is great talent out there ... but there's a world of difference between a teenager and a young entrepreneur," said Sayula Kirby of Index Ventures, which has backed a large number of European internet startups. "I wouldn't say we are in a bubble yet, but we are getting closer to the point where the froth begins."

Meanwhile, in the specialist media, Rob Day of the Cleantech Investing blog meanwhile revisits the continuing concern about a cleantech bubble, this time focusing on solar:
As for the verdict, solar VC bubble or not, it’s too tough to say. That’s a different answer than I would have given just a few months ago, when a “no” would have been the simple answer, but the crowded marketplace and rising valuations and deal sizes is worrisome. Also worrisome is seeing VCs get out of their tech-focused comfort zones to invest in unfamiliar business models. And when you hear stories about unworried investors and entrepreneurs who haven’t done their homework, that’s got to raise some eyebrows.
Are there a lot of reasons to be very optimistic about solar markets and the prospects for solar investments long-term these days? Absolutely. But could we be due for a bit of a break in the hyper-activity? Quite possibly, but maybe not quite yet.

As noted below, last week I handed in the final draft of my dissertation on evidence for a bubble in the AIM-listed clean energy sector. The event study methodology I used didn't provide any significant evidence of speculative bubble-like behaviour, but some of the data is certainly suggestive. I should be submitting the finalised paper later this week, subject to my supervisor's comments, and will put up a PDF of it here.

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