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First off, congrats to the guys who made the list. It's hard work being an entrepreneur, and I'm glad that you guys are getting some good press. But, I do hav
by iamelgringo 19y ago
First off, congrats to the guys who made the list. It's hard work being an entrepreneur, and I'm glad that you guys are getting some good press.
But, I do have a problem with how it seems that these businesses are being selected. It seems that the level of funding that these people raised is used as a hallmark of how good the entrepreneur is. Isn't the mark of a good entrepreneur how much they can do with how little?
I can understand why a video company like Video Egg might need a high capitalization. Bandwidth charges for video streaming are high. But, I'd still balk at taking $27 million in funding.
Etsy--31 million in funding. Granted, the company has 1 million users and 75,000 sellers. But really, 31 million dollars! What does an e-commerce site need 31 million for?
I've actually begun to see taking large sums of VC money as a competitive disadvantage. If these companies take $20-30 million in funding, the VC's are going to push for a 10x return. That means that their investors are wanting a $200-300 million exit. And, even at those rates, I'd imagine that the founders shares are quite diluted by that point.
And, I'd guess that the chances of getting a $200-300 exit are a lot slimmer than getting a $5-6 million exit. For details Google "Digg acquisition": http://www.google.com/search?hl=en&safe=active&client=firefox-a&rls=org.mozilla:en-US:official&hs=Ess&sa=X&oi=spell&resnum=0&ct=result&cd=1&q=digg+acquisition&spell=1 http://www.google.com/search?hl=en&safe=active&clien...
- optimal 19y agoYeah, it's like BW is blinded by the numbers--that money's not a personal gift to the founders (from "holed up alone in a room for 100 hours a week" to "Funding: $17.5 million"). Regardless, it's a validation of their efforts. True success will be determined years from now based on the outcome of these investments.
- davidu 19y agoI don't think BW cares about the amount raised. They didn't ask me until after we were already confident that I was going to be selected. It was like, "Oh, we forgot to ask -- how much money did you raise?"