Dotcom Bubble

What was the 'Dotcom Bubble'

A rapid rise in equity markets fueled by investments in internet-based companies. During the dotcom bubble of the late 1990s, the value of equity markets grew exponentially, with the technology-dominated Nasdaq index rising from under 1,000 to 5,000 between 1995 and 2000.
 

BREAKING DOWN 'Dotcom Bubble'

The dotcom bubble grew out of a combination of the presence of speculative or fad-based investing, the abundance of venture capital funding for startups and the failure of dotcoms to turn a profit. Investors poured money into internet startups during the 1990s in the hope that those companies would one day become profitable, and many investors and venture capitalists abandoned a cautious approach for fear of not being able to cash in on the growing use of the internet.
 

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RELATED FAQS
  1. What lessons did the tech bubble crash give to investors in the Internet sector?

    Learn how investors contributed to the dot-com bust and how Internet services and investing has changed since the market ... Read Answer >>
  2. How has investing in the Internet sector evolved over time?

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  3. How do venture capitalist investors view sustainable growth in a startup?

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