The BIS Warns: What the Railroad Craze and the Dot-Com Crash Tell Us About the AI Boom
Source: Startup Insider – Original Episode (episode in German)
The Bank for International Settlements (BIS)—the central bank of central banks—warns in its annual report of overheating in the AI boom and draws parallels to the railroad craze, the electrification of the 1920s, and the dot-com bubble. Björn Rieckhoff and Jan Thomas put the warning into perspective: It is not a cry of “the end of the boom,” but rather a neutral assessment. In 2000, Cisco was trading at 132× forward earnings and had $5 billion in free cash flow; today, Nvidia is at 35× and $60 billion. 80% of tech returns over the past five years have come from earnings growth, with only about 10% from multiple expansion. Add to that: circular financing between hyperscalers and AI labs, a SpaceX IPO lacking solid fundamentals, an OpenAI IPO that keeps getting postponed — and the question of why Europe is responding to Meta and Microsoft’s 150-billion-AI-infrastructure bets with a single Amazon data center in the country.
Key themes in this episode
- The BIS as a neutral early warning system: In its annual report, the central bank of central banks warns of overheating amid the AI boom—without a political mandate, but backed by a solid track record: credit and real estate bubbles were already on its radar as early as the mid-2000s.
- Historical Parallels: Railroad mania in the 1840s, electrification in the 1920s, the dot-com bubble in 2000—all following the same pattern: a genuine technological revolution, collective overinvestment, inflated expectations, and a correction. Currently still in positive territory, but the projection for the 2030s is turning downward.
- Substance vs. Story — Cisco vs. Nvidia: Cisco in 2000 with 132× forward earnings and $5 billion in free cash flow. Nvidia today with 35× and $60 billion. 80% of tech returns in recent years have come from earnings growth, with only ~10% from multiple expansion. A very different situation than in 2000.
- Circular Financing: Hyperscalers take equity stakes in AI labs, which in return commit to multi-year purchases of chips and computing power. Sell-and-lease-back of data centers. Financial engineering that remains less transparent in private markets.
- VC Concentration and PE Illiquidity: Fewer but larger funding rounds in the AI sector. $3 trillion unrealized in PE funds. Cash-on-cash performance is lackluster, secondaries are trading at discounts—structural resilience is becoming a key factor.
- Impact on the Average Consumer: 64% U.S. stocks in the MSCI World Index, with an overweight allocation to tech stocks. If AI valuations correct, it won’t just affect BlackRock—it will affect every retirement plan that holds an ETF.
- Europe’s response: Meta ~150 billion, Amazon ~200, Microsoft ~190 in AI infrastructure. In Europe: a single Amazon data center in the entire country. Don’t pour oil on the fire—ignite the European fire instead.
Transcript
This transcript has been edited for readability. The content and statements have not been changed. The original conversation was in German; this is an English translation.
Jan Thomas: Björn, hi, nice to meet you. How are you?
Björn Rieckhoff: Hi Jan, nice to meet you too. Yeah, I’m doing great, thanks.
Jan Thomas: Very good. We just touched on this in our prep chat: We’re recording this in the morning, and all of Germany is feeling the blues—we’re recording this in the morning after that… well, I don’t even know which verb or adjective to put at the beginning, but after Germany’s World Cup exit, we’re recording. For our listeners, that was at least a day ago. So, you said we’d take this opportunity to briefly rub salt in the wound. No, we’re not going to do that now. But speaking of that: I’d say I’m feeling just so-so. Yeah, that’s just how it is sometimes.
Björn Rieckhoff: You’re tired, disappointed, embarrassed—all of that.
Jan Thomas: Yeah, I’m not embarrassed, but I am disappointed. That’s just how it goes sometimes. But it’s kind of symptomatic of… well, we don’t want to spend too much time talking about Germany and the mentality here. But you’d certainly hope that some lessons have been learned, that an assessment is made, and that measures are put in place to ensure a better future. That’s what I’d hope for.
Björn Rieckhoff: Yeah, you know, I keep thinking—and you’re absolutely right—that this is symbolic of our society right now. I feel like we’re missing a few characters, a few minds that just stand out a bit from the crowd. This isn’t specific to Germany: When I watch the World Cup right now, it doesn’t really matter whether you learned to play soccer in Paraguay, Iceland—that’s a bad example—or France. It all feels very similar because people go through the same tactical training, and in the end, it all turns into a uniform mush. And I miss the characters—the Stefan Effenbergs of this world—who are a thorn in the side, speak their minds, and can drive a team forward, spur them on, and lead them. That bothers me—and it’s symbolic of some areas of our daily lives.
Jan Thomas: We don’t want to spend too much time talking about soccer, because I could comment on so many things—simply because it’s still so fresh. But let’s dive into the topic of where we should draw lessons—or perhaps have already drawn them—and now make some adjustments. You mentioned there’s an interesting study with some intriguing figures from an institution I hadn’t heard of before—and I don’t think you had either.
Björn Rieckhoff: No, not at all, actually. But that’s also because I don’t have a particularly deep background in macroeconomics—that sounds a bit harsh. I did study industrial engineering at one point, and that played a role. But I never really got to that level and ended up sticking with microeconomics. We’re talking about the Bank for International Settlements. As I’ve now learned after reading this report, it’s the oldest—or one of the oldest—financial institutions in the world. At the end of the day, central banks—the ECB, for example—are both the owners and clients of this institution, which is why it’s referred to as the “central bank of central banks.” It holds the portion of currency reserves that consists of other central banks’ gold reserves, etc. And it has published a study—it does this annually. What’s interesting about this is that, due to its relatively neutral political stance, it has no power in the traditional sense, nor should it be viewed in the same light as crypto bears or bulls who comment on the crypto market. It’s more about a neutral assessment of the situation, entirely without a political agenda—just observing and analyzing neutrally. And that’s why the whole thing carries quite a lot of weight, even among journalists, central banks, and politicians. I found that fascinating. They released their annual report last week and pointed out that we’re heading into a phase where the AI boom might—let’s say—burst, or at least is heading toward overheating that could potentially end in a recession if things go wrong. You drew a very symbolic comparison with the electrification of the 1920s, the dot-com bubble, and also the railroad mania of the 1840s. These are all historical examples mentioned in this report. Essentially, they say: All these boom periods followed the same pattern—a genuine technological revolution in which massive investments were made, but where expectations regarding these investments eventually became so inflated that they could no longer be realized economically. And then, in all these crises, recessions followed. You warn that the collective overinvestment we’re currently seeing in the AI sector will lead to this overheating. I’ll pause here for a moment.
Jan Thomas: I find this really fascinating, too, because honestly, I had no idea about the article we both read—this topic of “Railway Mania,” meaning the railway craze of the 1830s and 1840s that you just mentioned. It was completely new to me. I dug into it a bit and found it really fascinating. I can only recommend that everyone look into it. Because I had absolutely no idea that back then, with the invention of the railroad, there was at some point such overinvestment in railway infrastructure, in trains, and so on—because everyone felt (and that’s the parallel to today, almost 200 years later): If we don’t invest in this new technology now—which, for example, made people faster—in other words, a gain in efficiency, a great parallel actually—if you don’t invest there, then you’ll be left behind as a society, as a country, as a company. And I find that so fascinating. So it’s basically the same thing over and over again… I then asked myself: What does “bubble” even mean? And that’s basically exactly what it is. It comes along with this sense of FOMO, and then you start investing. Or—the definition I’d give it: You invest and assume that, at some point, someone else will pay you even more for what you’re paying for right now. So you essentially have an expectation projected into the future. I find this scenario so fascinating—and here we are, 200 years later, having learned nothing from it and doing the exact same thing all over again.
## **Björn Rieckhoff:** Yeah, it’s interesting because I think what you just said is almost like a textbook definition of the term. For my part, I’d distinguish between two categories: One is the 2008 financial crisis, where you simply—you could even say—saw fraudulent practices that led to certain assets no longer being backed by real value, and people tried to pass on an empty shell and make money off of it. And bubbles like that, which arise from overinvestment but are fundamentally backed by real assets—that’s a different category. And I find that fascinating. The Bank for International Settlements, or BIS for short, doesn’t ultimately say: ‘We have AI hype that’s unfounded and all nonsense.’ Instead, they do say: ‘No, no, we have real productivity gains—figures of 20 to 50% are cited.’ These are exactly the efficiency gains you mentioned in connection with the railroad mania. Nevertheless, we’re seeing collective overinvestment in the sector. And they’ve presented a graph—maybe we can link to it in the show notes—that essentially outlines a scenario based on AI capex: If everything goes well, what’s the resulting surplus? And if it goes badly, what’s the outcome? Currently, we’re still in a range where—regardless of whether things go really well or really badly, according to this bank’s study—we end up in positive territory. But if you take that further and follow the projections through 2030 regarding CapEx investments in this area, then we end up in a very negative range for a downside scenario. That’s actually interesting. They’re not saying, “All is lost; we’re heading completely in the wrong direction.” Instead, they’re saying, “Let’s pause for a moment—this is an indicator we’re seeing here.” Right now, everything is still fine—at least according to their projections—even if the overall situation isn’t meeting expectations. But if we keep going this way, we’re heading toward a scenario where things would have to go very well for all of us to be better off than before. Otherwise, the downside will really come into sharp relief. And I find that fascinating because it’s a very neutral presentation. It’s not the classic, media-hyped “This is hype! This is a bubble! It’s going to burst and we’ll all go under!” — or, in the bull case, “everything’s wonderful, no problem.” Instead, it’s presented very neutrally: “Right now, everything’s still fine, but we’re entering a phase where, if things go wrong, it might no longer be profitable because expectations are getting too high.”
Jan Thomas: Well, even if a bubble bursts—the housing crisis and so on—those are all just snapshots in time. You might have 3, 4, or 5 years that are tough for certain people. But that doesn’t change the world. 200 years later, Great Britain—where I think the railroad craze started back then, if I remember correctly—is still a country that’s doing well today. There are just winners and losers. So you always have to ask: Who’s affected by this? And still—you just said that in 2008 there were fraudulent elements, but not today. Now we have to be careful on the podcast not to paint Elon Musk in too negative a light. But we’re talking two weeks after the biggest IPO of all time. And compared to Anthropic, for example, it’s significantly less substantial. At least as of today. That could change—maybe in five years, the people who invested in it will be laughing all the way to the bank. But right now, it’s mostly just hot air. And that’s what I always find so interesting: European VCs are always saying that German founders need to learn from U.S. founders how to tell a story. And storytelling is just the beginning—you’re already halfway into the bubble at that point. That’s when you start making things out to be bigger than they actually are. It’s a bit like overselling. I don’t think it’s criminal—you just have to be careful, because there’s already a spark of that there.
Björn Rieckhoff: Yeah, I have a few thoughts on that. On the one hand, you said that these fraudulent elements—or at least dynamics that aren’t entirely objectively verifiable—are, of course, always present to some extent. Now, it’s true that, especially during the AI boom, a great deal of emphasis is placed on these productivity gains, but there are certainly dynamics—and the BIS essentially mentions these as well—that don’t feel healthy. They speak of circular financing. I think we’ve touched on this before in past podcast episodes: hyperscalers take equity stakes in AI labs, which in return commit to multi-year chip and compute purchases. That doesn’t feel quite right. It’s a self-referential transaction, a circular reference. Similarly, data centers are outsourced and then leased back—financial engineering, so to speak. The terms aren’t clearly disclosed because currently...
Jan Thomas: But this “sell-and-lease-back” model is quite common—it’s been around in the real estate industry for 50 years.
Björn Rieckhoff: That’s right, yes. But now—especially in the financial industry—there’s a trend where private institutions, which aren’t as strictly regulated as those in the public markets (by regulatory authorities), are taking on an increasingly larger role and becoming more and more relevant in the global economy. As a result, certain terms and conditions aren’t disclosed to the end consumer or the private stock buyer as transparently as they perhaps should be. Or they’re simply not as widely known. And these are dynamics that can be viewed critically. Although, fundamentally, we’re of course still talking about this technological breakthrough that we’ve never seen before. In that sense, it’s justified to some extent. But you have this acceleration that can drive the whole thing in a direction that could become dangerous.
Jan Thomas: But maybe even a BIS—or whatever they’re called—can’t really keep up with that. I’d like to bring this up again: We’re now moving at a pace where we have to understand markets and developments—that’s never happened before. Take, for example, this shift from linear TV to streaming—it’s a shift that feels like it’s been happening over 30 to 40 years. It started at some point and then had its first early adopters, but it’ll take 30 or 40 years before it’s completely replaced the old system. Here, it’s more like this: AI is coming with a force that no one understands, and on top of that, it’s affecting every sector. And that’s why I’d almost say that an institution like the BIS might be a bit overwhelmed by it. That’s really all I’m trying to say.
Björn Rieckhoff: I think it’s also very important to have this tension between institutions that move slowly and seem overwhelmed, and those that are pushing everything forward at full speed. Somewhere in the middle, you’ll probably find a healthy balance. I’m not at all upset that such institutions—some of which are very neutral, without a political mandate, and focused on certain dynamics—allow for a diverse range of opinions. One thing that’s actually alarming, as you’ve already hinted at, is the speed at which this is happening. But also: The global economy is more interconnected than ever before—not just within individual countries, but also across borders. As an average consumer, I have an MSCI World ETF—like probably many others—and I invested in it to supplement my retirement savings. And then it hits you: Wait a minute, 64% of the stocks in there are actually U.S. stocks. And of course, when tech stocks are valued so highly, they’re also heavily represented in ETFs. That means that through these kinds of instruments, you now have a level of interdependence that—if things go south—will affect not only institutions (the BlackRocks of this world, which are invested everywhere, or the Nvidias, which are primarily invested in AI companies), but also the average Joe, who’s in trouble because he’s putting his retirement savings at risk through a supposedly safe instrument like an ETF. This has a much greater impact than in the past because the boundaries are so blurred—or rather, because everything is so liquid (i.e., interconnected).
Jan Thomas: And still, I think it’s important to consider this: That crash in 2000 during the dot-com crisis, when the bubble burst—many stocks on the Nasdaq lost 75 percent of their value, two-thirds, three-quarters—something along those lines. And yet: If you’d had an ETF and just stayed invested, your money would be worth many times more today than if you’d just left it in the bank. You would have picked up stocks like Apple, Microsoft, and Amazon—and they’ve seen massive increases in value. All I’m trying to say is: These cycles—as I put it so succinctly earlier—are just a redistribution that lasts a few years when a bubble bursts. Of course, that’s difficult for some people. But the bottom line is that it lasts three, four, five years, and then the economy usually just starts growing again. It evens itself out. The systems have always been stable enough so far. I can’t project that into the future right now, and I can’t fully grasp how AI is changing our economy. But we still have to ask: What does it actually mean when we talk about a bubble bursting—what does that really mean in concrete terms? It always sounds so terrible, and maybe it’s not that tragic after all.
Björn Rieckhoff: No, you’re absolutely right. And what also reassures me is looking at certain KPIs, especially valuation multiples. That’s something we in venture capital really like to use to gauge market sentiment for certain models. And I found an interesting statistic: Back in 2000, during the dot-com bubble, Cisco was valued at 132× forward earnings and had 5 billion in free cash flow. Nvidia—which a lot of people say is totally overvalued—is valued at 35× forward earnings, not 132, but 35. So it’s on a different level. And it has 60 billion in free cash flow. That’s worth noting, too. Sure, there’s been a bit of inflation in the meantime, but inflation doesn’t make up for the difference between 5 and 60 billion. And here’s another statistic I saw regarding tech returns over the past five years: Just under 80% came from earnings growth and only ~10% from multiple expansion. By comparison—during the dot-com era, virtually everything came from multiple expansion. And what I’m trying to say is: “bubble,” as you put it, is a very, very extreme word for something that clearly has very strong fundamentals. I mean, 80% driven by earnings growth suggests that something is working. It’s not as if this is all just financial engineering—making the balance sheet look good, spinning off assets via sell-and-lease-back to improve the numbers. No, at the end of the day, it’s actually net income, in a model that’s experiencing very high demand and where people are willing to pay.
Jan Thomas: Yeah, and still—you’re right about that, but I’d say that during the dot-com bubble back then, if you draw parallels (though I haven’t actually checked this): Back then, the VC multiples you just mentioned were probably just carried over to the stock market. You said: Okay, investments were made, and then the company went public at exactly that valuation. I don’t think that’s the case anymore—people have learned from that. You saw it with Klarna back then: internal funding rounds or internal valuations sometimes don’t reflect the market. In that case, you have to do a down round or a write-down. That’s healthy, too. Now, here with AI—that’s the only thing I see differently: None of us fully understand AI yet. We don’t even know yet whether we’ll all still be working in ten to twenty years or whether robots will take over our jobs. These are all factors. We’re full of imagination right now—and that’s why everything could be right. And that’s why, when banks make statements like that, I’m a bit cautious—because no one can see into the future. They can only look to the past and say what would have been the right thing to do back then. If we apply that to today, it might be a warning sign—but maybe it’s not true at all.
Björn Rieckhoff: That could very well be the case. I think what we’re seeing right now—and this has been the narrative for the past few years, but it remains true—is that there is, in fact, more investment in VC, and these investments are going to fewer companies. So there are larger funding rounds, but they’re much more concentrated in the AI sector. Now, you could also argue that every startup and every tech company in the coming years will have something to do with AI in one way or another. That’s certainly true. In that sense, the sample is maybe a bit skewed because so much falls into this bucket. But it’s true that, overall, fewer funding rounds are happening than in the past—though they’re bigger. This reflects the concentration in this sector and the expectations that come with it. This carries through all the different stages. And then, as you mentioned with the Klarna example, at some point reality sets in: What are valuations actually like in private markets? What is the private investor willing to pay versus what is the broader market—the public markets—willing to pay? You’ve seen some movement with SpaceX in recent days—a cooling off. However, you’ve also seen rumors in recent days that OpenAI is pushing its IPO back to next year—again, a tempering of expectations—or uncertainty when it comes to assessing how the public markets actually price such models.
Jan Thomas: I might look at it a little differently sometimes, because multiples and stuff like that aren’t really my thing. Let the VCs figure that out among themselves—if they feel like they have to value Lovable at 100× revenue or something like that, then that’s their business. It’s really none of my business. But what I find exciting overall is when money is allocated to areas that are actually major problems—that’s where I see the opportunity right now. And I’d say: inefficiencies. We’ve talked here several times about Germany and Europe, and the things that get people worked up are really just inefficiencies. No one wants to spend their life dealing with things when they know there’s an easier way. When you constantly find yourself thinking: “Now I have to copy this by hand from one document to another, just because the government agency said they need it in handwriting again.” These things—if they’re solved, or if world hunger is solved, or there are so many startups currently working on this—Neko Health (Midjourney has just released a fascinating tool on the topic of preventive healthcare)—or take Legora and Harvey as examples. Lawyers—we all know it’s a tedious process. If those processes are streamlined and we all have a little more time for kids, family, whatever—for the important things in life—that’s great for starters. And if a few people fall by the wayside in the process, I don’t care. There are winners and losers, sure, but the problem itself gets solved. We have more railroads today than we did 250 years ago, and that’s great. I mean, if you live outside Berlin, you can hop on a train and be in Berlin in an hour. That’s the result of overinvestment back then—and the start of a new infrastructure, because people said, “Railroads are cool.” That’s kind of how I look at it, too. That’s why I’m not too worried about it. Maybe there’ll be a few rough years ahead—it could happen.
Björn Rieckhoff: You’re right in that regard, and you already touched on this long-term perspective in your introduction: There may be occasional recessions. But when it comes to infrastructure, we’re talking about very long time frames. And sure—AI infrastructure has a shorter lifespan than a railroad track you lay down. A common criticism these days is that this stuff becomes obsolete so quickly and requires constant reinvestment. But so be it. You have these cycles, some of which are longer or outlast a “burst” bubble and still lead to progress. Yes, that’s true. Now the question is always: How much staying power do individual people have? We’ve been in a tense situation for years now, because we’ve been talking for ages about liquidity in the market that doesn’t actually exist. It’s just constantly being passed along. We don’t really want to do secondaries, but we’ve had to do a lot of them lately and sell at a discount because the LPs are pushing us. And this isn’t just an issue in the Berlin VC market—it’s a structural problem within the VC industry.
Jan Thomas: That was a structural problem within the VC industry; VCs need to discuss among themselves whether the way funds are structured is healthy.
Björn Rieckhoff: I agree with you—but it goes beyond VCs. Even PE-held companies remain unsold. I recently read that 3 trillion dollars (that is, German trillion) are unrealized in PE funds. Institutions—and since PE often involves more institutional money than VC—also have a lot of money tied up there that hasn’t been realized. And cash-on-cash performance has been really lackluster in recent years. It’s still all about book values. That’s why this issue persists. Getting back to the point of who has the staying power—if you can hold onto the whole thing over the coming years and have the luxury to do so because you enjoy the trust of your investors, or because you’ve structured the fund’s term accordingly, have an evergreen fund, or however else you’ve managed it—that’s great. But a great, great many funds will fall by the wayside. And when things go south, they’ll have to sell at the very moment the bubble bursts and expectations aren’t met in the short term.
Jan Thomas: Yeah, maybe just two more thoughts. One is: The question is always, should you worry? If everyone is warning about a bubble right now, then the question is: Why are they doing that, and what does that mean for you personally? It only makes sense to worry if you can actually do anything about it. And I think the one thing you can do as an individual is to pull out of markets that might be overheating and move into other asset classes. Maybe we can do that. But as for the recession you just mentioned being avoidable—I don’t believe that at all. I think we’re already too far down that road. The only thing that might happen is that the pace actually keeps accelerating. But then it’s more of a two- or three-year thing. It’s bound to happen eventually—just look at a company like Meta and how they’re investing. That’s driven by greed. And when greed takes over reason, there comes a point where something is bound to burst. That’s just the way it is. That’s why I’m relatively relaxed about it, because there’s nothing we can do to change it. The only point I’d make—and we’ve already talked about this—is that we need to look at this from a European perspective. And that brings me back to my point: we shouldn’t just stand by and watch others overinvest while we do absolutely nothing ourselves. I’m not saying, “Let’s pour even more oil on the fire.” But it would be good to light the European fire.
Björn Rieckhoff: Yeah, you brought it up. I think Meta has invested just under 150 billion dollars in AI infrastructure. I think Amazon invested 200, and Microsoft around 190. So we’re talking about figures that are absurdly high. And that has to sink in first. At the same time, I agree with you: if we see just a single data center across the entire country, that’s a drop in the bucket. That can’t be it. We need to figure out where we stand. As I said, the foundation is at least there. I’d like to see more “Anthropic equity stories” than “SpaceX equity stories”—ideally, such cases emerging from Europe, even if they’re many times smaller, but substantively very well-structured. I’m hopeful that we’ll see that happen over the coming years.
Jan Thomas: Now I’m just thinking: What are we leaving our listeners with? Do we have a conclusion, Björn, or not really? It was more of a status update where we said: Okay, these are the risks. And I’ve learned a lot—both while preparing for this and from the conversation itself—I’d recommend that everyone check out “Eisenbahnmanie.” I didn’t know about that central bank; that’s interesting, too. But I wouldn’t—as I said—take it too seriously, I think. I don’t know how you feel about it. Do we have any takeaways, would you say, or trading recommendations? Nope, not really.
Björn Rieckhoff: I wouldn’t call it a recommendation for action just yet. I’d say—as you mentioned—it’s more of a snapshot of the current situation. It raises listeners’ awareness of a few future trends. Especially this wave of IPOs that’s starting to gain momentum with SpaceX (which was very story-driven) and is set to continue with Anthropic and OpenAI—we need to watch that very closely to understand: How will such models be received in the public markets? A lot depends on whether we end up seeing a narrative where the offering price was massively overvalued and then corrected, or whether people say: “No, wait a minute, we actually have a sustainable shift here, and you’ll see a positive trajectory over time that’s also driven by the broader market—that is, private investors.” For me, that’s perhaps a sort of mini takeaway: to keep a close eye on this and examine the individual developments. Above all, look beyond the surface and understand: Is this an IPO driven by a story? Is it an IPO driven by fundamentals? There are different categories, and I think we’ll see some exciting developments in the coming months.
Jan Thomas: Totally. And maybe—you’re surely familiar with the movie *The Big Short*; we can link to that again. If you haven’t seen it—it stars Christian Bale and Brad Pitt, and later also features Michael Burry—you should definitely check it out. It gives you a sense of the last crisis—the housing crisis—and how it unfolded. There’s Michael Burry, who even today keeps popping up as a critic or a cautionary tale—I think he labeled Nvidia, for example, as significantly overvalued. I think he pointed this out back then, two years before the crisis hit. Maybe that gives you a sense of where we are right now. Maybe we’re in 2005, maybe 2007, or maybe we’re already on the brink of 2008. We’ll see.
Björn Rieckhoff: You said earlier that, if anything, you wouldn’t take the BIS too seriously because you also think it’s a very conservative player. Now that you’ve just brought up the housing crisis: They actually warned about the build-up of the credit and real estate bubbles as early as the mid-2000s—around 2005 or so.
Jan Thomas: Oh, really?
Björn Rieckhoff: Yeah, look at that. Track record as an early warning sign: not bad at all.
Jan Thomas: Okay, I’ll admit it—I didn’t know that. No, but...
Björn Rieckhoff: Nah, but it’s fair. I didn’t know that either before. And as I said, I learned quite a bit while preparing for today’s episode. So, maybe it’s worth keeping an eye on that to get a neutral assessment of the market. It might not be such a bad idea for the listeners.
Jan Thomas: Let’s wrap things up by saying: We’re still staying optimistic and positive, right, Björn? Always. We’ve put soccer aside for now, wiped our mouths, and here we go. As I said, I’d still like to see Europe make the right investments. That’s the only thing still missing from the whole picture.
Björn Rieckhoff: Yeah, that's right. (...)
Jan Thomas: Björn, that was fun—thanks to you.
Björn Rieckhoff: Yeah, me too.
Jan Thomas: Yeah, see you next time. Ciao.
Björn Rieckhoff: See you then! Bye!
About Björn Rieckhoff
Björn Rieckhoff is an independent advisor and business angel with nearly ten years of experience in early-stage venture capital. He helped build Cavalry Ventures as its first employee and later became a partner of the fund. Today he supports founders more directly with fundraising — sharpening their story, stress-testing business models, and setting up lean financing processes. With over 80 transactions and board seats from seed to Series B, he brings this perspective as a sparring partner for entrepreneurs.
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