Q3 Snapshot: The Startup Ecosystem
episode
Startup Success: A Podcast for Founders & Investors
17 min
2 speakers
8 chapters
transcribed 17 days ago
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What does Steve Lord say about the Fed’s recent rate cut and its immediate impact?
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Welcome to Startup Success. We're back with one of our most popular guests, Steve Lorde, the Chief Operating Officer at Berkeley. Thank you so much for being here today. Steve also runs our knowledge share practice, which keeps all of our CFOs, accountants, everyone working with clients up to date on all the latest and greatest in the startup ecosystem. Steve, welcome back. Thank you for being here.
Awesome. Thanks for having me.
Yeah, as we're gonna delve into the current state of things and the recap after Q3. I mean, where are we with the economy? Q3 is ending.
Yep. And and anybody who's paying any degree of attention knows that the market is fixated on the jobs numbers and the inflation numbers, right? Those are the two things that are alternatively driving the political discourse and the pressure on the Fed and internally within the Fed itself, right? We did get a cut, which was awesome. Uh we've talked on this program several times about when that was gonna happen. So I was really glad to see it happen. It was, I feel, a little bit more of a kind of a sop to the pressure. I don't know if they actually had data that needed to push that because remember what the mandates are. Right, full employment and low inflation. Then there's this shadow third mandate that they went back and and dug out of the, I think the Federal Reserve Act in the 30s.
That speaks to low long-term interest rates. Right now, we haven't really talked about that ever. From Fed watchers for 30 years, I've been doing this a long time. There's never really been a lot of discussion around how the Federal Reserve could manipulate long-term rates. But there is a thing there. If they were able to start doing that, that would trickle its way through the economy. One thing I wanna call out though is yes, we got a rate cut. Yes, we're probably gonna get at least two more, maybe three into January of another 75 basis points, maybe a hundred, but I think for us to really go beyond that, we're gonna have to see. You know, it's kind of like don't be careful what you wish for, because you'll have to see a dramatic deterioration in the underlying economy.
So everybody's like lower interest rates, yay.
How will the lagging effects of interest‑rate cuts and tariffs shape the economy over the next year?
Well, yeah, but hold on, right? Because they're only really doing that if they are worried about where things are going to go. Two other quick points. The two big levers that we're all talking about right now, the interest rates and the tariffs, both of those take 12 to 18 months to percolate all the way through an economy. Okay. So the interest rates that we're lowering now are going to be visible a year from now. The tariffs that we put in in April and May are gonna really start showing up in the beginning of the spring. There is a gestation period to these things that virtually everybody pounding away on their keyboards on the online don't really talk about, right? Don't look at inflation now to see whether tariffs are impacting.
And it's gonna be inflation in March that shows it. And that's what the Fed is worried about, right? They're not going to cut interest rates like crazy because they know that that is coming. So it's a complicated time. The economy I'll also just call out is in good US economy fashion is typically stronger than the rhetoric. Once in a while you'll see it the other way, but it is usually such that we almost talk ourselves into recession. Underlying economy is still doing pretty well. You know, we we hear a lot about these folks that can't find jobs and all that sort of stuff. And we're hearing a lot about how the Bureau of Labor Statistics doesn't know where it's getting its data from. And that that's Fine, but it's not different.
Right. The big thing with the Fed is is it any different than ten years ago? The answer is no.
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Chapters
8 chapters
1
What does Steve Lord say about the Fed’s recent rate cut and its immediate impact?
0:01–2:26
2
How will the lagging effects of interest‑rate cuts and tariffs shape the economy over the next year?
2:26–4:56
3
Why does Steve argue that the U.S. economy is stronger than the headlines suggest?
4:56–7:02
4
What’s the current state of the venture‑capital market and why is AI an outlier?
7:02–9:26
5
What should founders avoid doing when raising capital in today’s fundraising environment?
9:26–12:07
6
How can founders leverage existing investors and cap‑table relationships to secure the next round?
12:07–13:52
7
What are the key elements of a pitch deck that will win over investors in a cautious market?
13:52–16:04
8
What does the outlook for dry‑powder capital mean for startups heading into 2025?
16:04–17:41
Speakers
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