Marc Andreessen: ‘There Isn’t a Bubble’

Because if people think there is, there isn't

During an interview at All Things Digital’s D9 conference Wednesday night, venture capitalist Marc Andreessen made the claim that there’s no tech bubble, despite the skyrocketing valuations of Silicon Valley companies.

According to Andreessen's logic, the very fact that people are worried about a tech bubble means that it doesn't exist. “A very large number of people think there’s a bubble—which makes us think there isn’t a bubble,” he explained. “Generally if everyone’s upset, that’s a good sign. But if people are euphoric, then I’m scared,” he added, mentioning that back in 1999, no one was worried about a bubble.

The stock market also proves that there’s no bubble, Andreessen reasoned, noting that large tech companies including Apple, Google, and Microsoft are trading at single-digit price-to-equity ratios. Investors are wary of tech stocks because “the public market is tremendously scarred by what happened 10 years ago,” he said. But what about LinkedIn, which had an astronomically high IPO last month? “It’s only one company and they just went public,” said Andreessen. (He also happens to be a angel investor in the company.)

As a partner in VC firm Andreessen Horowitz, which has invested in tech companies like Facebook, Groupon and Zynga—all of which are supposedly contributing to this current bubble—Andreessen had better hope that he’s right.

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