Shooting from the hip but—VC. Specifically, valuation models and investment horizons for social networking services that run on UGC. The totally free ad-suppor

Shooting from the hip but—VC. Specifically, valuation models and investment horizons for social networking services that run on UGC. The totally free ad-supported model is really the only one that has the potential to generate both the user growth and ARPU growth to create those 10x-1000x exits, and do so within a reasonable horizon for the fund that's investing in the company. If you start a service that costs money to the end user, you remove the addiction to engagement to drive ARPU, but you risk cratering your user growth, or at least set your growth on a scale that will be unimpressive at best for venture backers. So platforms stay free and tolerate those community problems, because the user growth is attractive, and if you can make the ad dollars work, you can show good revenue potential and get that spicy multiple.