Raised US interest rates could stunt the growth of startup businesses

Historically low interest rates over the past seven years have fueled tech investments, but now investors may be spending their money more cautiously

The decision to raise US interest rates for the first time in seven years could have negative effects on established startup businesses, investors have said, marking the start a new era of more cautious investment.

"The historically low interest rates over the past few years have fueled asset growth in the public markets and real estate, as well as strong consumer and business spending," says Kyle Lui, principal at DCM Ventures, a Menlo Park-based venture firm that specialises in early stage tech investments including BitTorrent, YikYak and Tiebaobei. "We could see companies across the board - from startups to large companies, start to feel the impact on normalized interest rates."

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