Yes, I should have mentioned the copyright issue. The Napster lawsuits were still fresh in people's memory, and I'm sure a lot of entrepreneurs and and VC's we

Yes, I should have mentioned the copyright issue. The Napster lawsuits were still fresh in people's memory, and I'm sure a lot of entrepreneurs and and VC's were frightened of starting a video sharing site that was so openly being used to share copyrighted clips. Youtube was acquired very quickly (within a year of public launch), so total losses were of course much lower than Facebook. But due to the bandwidth costs, YouTube had to burn a half-million+ a month very quickly after launch. Not many entrepreneurs are connected enough to get that kind of cash so quickly. Facebook could grow the site while spending only in the low five digits, without needing to quickly raise a large venture round.