This Tech Bubble Is Going to Be Much Worse

schiffgold.com / BY MIKE FINGER / MARCH 6, 2015
Peter Schiff isn’t the only one warning about a new tech bubble. Renowned businessman Mark Cuban just published a commentary that draws comparisons between today’s unsustainable tech explosion and the last dot-com bubble. Only this time around, Cuban warns that the carnage of the pop will be worse.

Just as back then there were always people telling you their idea for a new website or about the public website they invested in, today people always have what essentially boils down to an app that they want you to invest in. But unlike back then when the dream of riches was from a public company, now it is from a private company. And therein lies the rub.”

Cuban explains that there are nearly a quarter-million “Angel” investors in the United States. These are individuals who have given money to small tech companies via private investment. Many of them participate in “crowd funding,” which allows small investors to pool their money and essentially become amateur venture capitalists.
Cuban believes all of those Angels are throwing their money into worthless companies. These companies sell the dream of creating the next big app without offering any guarantee of returns on investment. He writes that the vast majority of Angels will never see a cent on their money.
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