Markets might fret over when the U.S. Federal Reserve will finally hike interest rates, but venture capitalists are divided over whether there is any cause to worry.
Despite speculation to the contrary, the Fed on Thursday kept rates at the historic low levels at which they have remained for the last nine years. These low rates have kept borrowing cheap, attributing to a boom in funding for start-ups as investors hunt for high-yielding assets and hedge funds, for example, pour money into high-growth technology start-ups.
The result is a surge in the number of start-ups worth $1 billion or more. The number of $1 billion-plus tech start-ups, known as "unicorns," has surge to 124 today from four in 2009, a 3000 percent increase, according to Credit Suisse. Some, like Xiaomi or Uber, gaining valuations in the range of $45 billion to $50 billion dollars.