2. The .com Bubble

In the mid-1990s, a new type of business emerged: The .com, a company either based solely on the Web or servicing the Internet, its people, and its technology. When early .coms’ stock values shot skyward, venture capitalists jumped aboard to finance Internet startups.

A .com’s lack of a viable business plan didn’t stop many VCs from throwing in money. Investors and startup executives assumed that once a .com had peoples’ attention, the money would come organically in the future.

Speculators jumped in, creating a market full of wildly overvalued startups. Lavish spending and astronomical publicity campaigns followed. .coms burned through their VC money, positive it would come back soon. Day trading became a relatively common way to make fast money.

In 2000, the NASDAQ began to trend downward, leading to what’s known as the .com bust.