Appendix 5 – Consolidated questionnaire with statements based on interview data

What is your personal definition of an economic bubble?

High demand that can´t be satisfied through the offering and which is strongly influenced by external factors. The consequence is, that this demand does not fit the real circumstances.

There is a big capital accumulation without any equivalent value.

Economic bubble is the overvaluation of a company value or a company in general compared to the actual value or the actual cash flow of the company.

According to my definition there is a bubble if the valuation of a company stands in no relation to the fundamental value of the produced good anymore.

Discrepancy between real economy and valuation benchmarking. Can you think of indicators with the ability to create a bubble? More market participants enter the market.

Rising valuations as well as the increasing amount of money.

Trend following model - Enough people who think that the future will look bright for them.

Validations increase massive within without a change of the important performance indicators.

It is difficult to define these indicators since every crisis is differs in its nature.

Lack of alternative investment opportunities - A lot of liquidity caused by stupid money.

Massive over valuation of future potential, access to capital, liquidity

How would you estimate the evaluation of technology related companies? overvalued. Investors follow the hype rather than executing due diligence. overvalued. The valuation of companies is simply a bet on future developments. Overvalued. The strength and funding of competitors is not predictable. Nowadays, a new entrant can become market leader and force an incumbent player into

bankruptcy.

Overvalued. There is no real alternative existent, except stocks and stock similar investments.

It depends. Some investments are smart, based on analysis but still fail to generate the desired returns. Some investments are stupid, based on the crowds’ investment behaviour and they generate the desired return eventually. It is not black or white. Overvalued. You must consider a lot of different components when it comes to value definition. Nowadays companies often neglect these components. Since a lot of investors don’t fully understand the technology they oversee the forgotten components but still invest.

In how far would you describe the current investment behaviour in technology related companies as healthy/ sustainable?

Unsustainable. It always depends on the growth. If there is growth there will be someone who want to put money in it.

Unsustainable due to inadequate due diligence, lack of technical expertise on the auditing and investors site.

Neither. There is no one fits all solution. Focus on the sustainability of the business model.

there will be a consolidation.

Neither. The kind of investor you work with is important to give a statement regarding the sustainability.

Neither. Companies prosper, get acquired, become market leader or fail. Most of them plan an exit or a sustainable growth but there are too many (external) factors that can influence these intentions.

Does this investment behaviour exist in technology related companies exclusively? Yes, it happens almost exclusively in technology companies because the defined trends only require a one-time investment and contain indefinite scalability.

No. Probably it is an industry overlapping phenomenon.

No. I would say there are always development in industries. Those destructive mechanisms reach from one industry over to another one. So, it is not technology specific but rather focussed on the destruction and market entering. how bigger the destruction and the related chance to enter a market how more fantasy is put into the valuation.

Yes. Due to a lacking technology expertise in nowadays funding teams the correct can’t be defined by them nor the investors correctly.

Yes. Technology drifted away from all economical mechanisms. Since there is no real market mechanism that sanctions bad technology.

Would you describe the technology related character of nowadays companies as justification for high investments or more as a factor which enables a trend? Yes. It is an enabler since it is easier to scale up, easier to improve than manufacturing (updates) and bares more potential (simple and cheap device with free software). Yes. High quality technology is the fundament and if the maintenance costs are low. Yes. Technology is an important driver that brings lot of uncertainty. High uncertainty brings high returns.

Yes. It is much easier to translate an app into another language than to build up a production plant on another continent.

No. People don´t understand the product they sell or invest in. The consequence is, that they don’t assess based their knowledge but based on the other investors behaviour.

Would you say that wealthy investors and the global economy encourage the tendency to overvalue?

No. The typical investors are not interested in increasing the valuation if they are investing money in it by themselves. Only if they already own shares and want them to increase their value.

No. The Investors goal is to give a head start through a major investment to gain a competitive advantage rather than a market manipulation.

Yes. I think they can cause a share price fluctuation by themselves to create a trend following behaviour.

No. There is nobody who really fosters the bubble because the end of the bubble is difficult to foresee.

No. Since their own money is often on the line I wouldn’t think of a trend of big investors to overvalue.

Yes, these people try to pump the bubble up as far as possible with a little equity or own money. Often, they collect money, invest and leave the bubble before the bubble bursts.

Can you think of an industry branch you would invest in? Smart City, Smart Home. In general, IOT.

E- health, Medicine and Biotech.

HR (Digitization of Human Resource management). AI, Machine Learning.

Alternative Energy. Privacy.

What effect would a burst bubble have on society and economy?

A counter- reaction. Capital would actively leave the market. Only the high potential start-ups will survive.

Bankruptcy, unemployment, depression and consolidation of the market. Redistribution.

More regulation for foreign / risk capital.

Can you think of mechanisms to protect society from another bubble? No. Upcoming industries don´t have historic data what makes it difficult to create mechanisms.

No, and we did not learn from past performance.

Yes. Regulation and maximum amounts of risk capital investments.

Yes. Fixed interest rates to prevent funds from getting forced into risk investments. Yes. Transparency regarding investments made. Overvaluations and bubbles don’t grow around one company but around an eco-system.

Do you think that financial markets would be interested to prevent bubbles from rising in future?

Yes. Bubbles aren’t useful for them. Investors leave markets and promising companies are not funded.

No. I think this is necessary for the regulation of the financial markets.

Yes. Bubbles are inefficient since everything you build will be destructed. In phase of constant growth, this would not happen.

No. crisis brings back normal market conditions. When a bubble bursts there will be always companies who go bankrupt and others which can reposition themselves. No. Financial markets want movement. Financial markets are interested in a working economy.

No. it is not a bank who wants bubbles but rather a customer who wants to extraordinary returns. Customers don’t want to know how their investment increases but that there is an increase.

What would you think is the next enabling factor/ trend for high valuation? Decentralized computing.

Autonomous intelligence

Virtual reality & Augmented Reality Alternative resources

Technology. technology is crude oil of the future Space due to overpopulation