What Is ZIRP And How Did It Poison Startups?

ZIRP stands for “Zero Interest Rate Policy,” and it refers to a stretch of time — most recently throughout the pandemic — in which the Federal Reserve sets interest rates around 0% and commercial banks are able to borrow money for next-to-nothing.

In this episode of Dalton & Michael, we’ll talk about some of the downstream side effects we saw during this stretch of time: an explosion of unicorns, a surge of new investors, and the impact it had on the way founders think. We’ll share the advice we gave YC founders to brace them for the future, and how some companies made the right move in the middle of an unusual/unsustainable moment. Join us as we look back at how it all played out.

Apply to Y Combinator: https://yc.link/DandM-apply
Work at a Startup: https://yc.link/DandM-jobs

Chapters (Powered by https://bit.ly/chapterme-yc) -
00:00 - Intro
00:12 - What is ZIRP?
01:51 - Why ZIRP
03:39 - The Corn Analogy
04:20 - Startups & Stocks
06:06 - Money ≠ Success
07:53 - Unicorns
09:55 - Winter Was Coming
11:15 - Lucrative Lending
12:56 - 3 Types of VCs
14:09 - Build for Endurance
15:24 - The Aftermath
17:45 - Outro