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>could they decide to redirect their money toward smaller interests, increasing the availability of capital for 'the rest of us'? Probably not. That money is
by ZachPruckowski 16y ago
>could they decide to redirect their money toward smaller interests, increasing the availability of capital for 'the rest of us'?
Probably not. That money is pretty much stuck there, as VC is an illiquid investment. Money invested in Groupon isn't going to get paid back until they have a "liquidity event", like being bought or IPOing, or until you can sell it to another investor. However, it's possible a larger fraction of new VC investments could be targeted at "the rest of us".
- DanI-S 16y agoI was actually referring to the cloud of people who may be planning on participating in an eventual IPO rather than those who have already invested.
- marchustvedt 16y agoWell it's definitely not a one-for-one distribution, but those Groupon dollars do make it around. Our site has Groupon ads popping up almost constantly, and actually tend to yield a higher clickthrough. Massive injections of capital into Internet businesses do help overall economy of web startups. The danger, like the Yahoo comment earlier, are the spotty business models and expansion that are built on that frothiness. Cause when it goes, it's those startups that crumble first. The ones that figure out a business model that isn't tied to a flush VC climate should be ok. eBay as I recall, did just fine after the first bubble.