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The linchpin to the whole thing is the easy VC money. It's what makes both the few startups turning into GooBooks and the many startups turning into ZombiePlaty
by hkarthik 14y ago
The linchpin to the whole thing is the easy VC money. It's what makes both the few startups turning into GooBooks and the many startups turning into ZombiePlatypus possible.
As soon as the smart money that's currently focused on VC finds decent returns in other, less risky investment vehicles, the VC money train will stop. It's just a matter of time.
- dsrguru 14y agoThat certainly would cause the bubble to start losing air so-to-speak, but I'm not sure it would pop. If you think about it, Google and Facebook happen to be specific examples of companies that could have become billion dollar companies without VC investment. Other companies like Amazon and Tesla Motors are not.
- hkarthik 14y agoGoogle becoming a billion dollar company without VC investment is possible, but it wouldn't have happened nearly as quickly, and it's quite possible that it would have been acquired by Yahoo or Microsoft. I disagree completely on Facebook becoming a billion dollar company without VC. VC funding is what allowed Facebook to monetize much later and gain huge cash reserves by selling tiny portions of equity at extremely high valuations.
- dsrguru 14y agoWere those cash reserves at Facebook used for anything besides hiring people to write advertisement monetization code? I was under the impression that the rate at which Facebook accumulated users would have been very similar to what actually happened had they just received angel investment and used the original employees.