As a result of the rapidly-increasing usage of the
Internet, many investors were eager to invest, at any valuation, in any company that had one of the
Internet-related prefixes or a "
.com"
suffix in its name, leading to a
stock market bubble. During the bubble, the valuations of companies in the
quaternary sector of the economy increased rapidly. Venture capitalists, eager to profit on this investment demand, moved to raise and invest capital faster and with less caution than usual. A combination of rapidly increasing stock prices, market confidence that the companies would turn future profits,
speculation in stocks by individuals, and widely available
venture capital created an environment in which many investors were willing to overlook traditional metrics, such as the
price–earnings ratio, in favor of basing confidence on technological advancements.