I've gotten hung up on this before, but after two years away from the Valley, I realized a lot of this stuff is small potatoes. We've all seen companies that h

I've gotten hung up on this before, but after two years away from the Valley, I realized a lot of this stuff is small potatoes. We've all seen companies that have been involved in multi-million dollar transactions on pure hot air and politics alone. These can seem discouraging to people who want to build actual businesses, and deals like Tumblr and Instagram are in another league entirely. But, for most of them, you really have to look at the actual magnitude of these things (on a financial level) before you decide to be indignant about them. As a thought experiment, if you take the amounts of money involved in typical fundings and even a lot of exits, and compare it to amounts of money involved in things outside the startup ecosystem, it can be thought-provoking, even if you're comparing apples to oranges. For instance: - The project budgets of large consultancies. (e.g. I worked on a routine project at a consultancy once where the budget was $12M.) - Smaller government agencies and civil engineering works (e.g. new Central Subway on 4th St is around $900M [how much politics do you think is involved in that?]) - Real estate listings - The amounts invested in even smaller hedge funds/mutual funds. (I think Zed Shaw had a piece on this) - The profits of bigger SV companies that actually are profitable (Google, Apple, etc). Or, the budget of some given department in such a company. - Real acquisitions outside of tech (see the WSJ on an average day for figures that can make your head spin). I know these things are obvious, but it really needs to be stated sometimes. It's hard to rationalize big numbers unless you really think about it. And you can get tunnel vision living in the Valley. $5M here and there is chump change in the grand scheme of things in the world that venture capitalists and large enterprises inhabit. There is bound to be a certain amount of noise you see observing these transactions, and definitely politics. Fun to watch and comment about, but not really important. While these aren't grave injustices, I guess I would concede that when taken wrong, it does have some chilling effects for people like the OP and myself. The current business climate does create some awkward and unnecessary dilemmas for people in the uncanny valley between being an entrepreneur and an employee. There are plenty of smart people who, in a perfect world, might go for starting a fairly medium-risk/medium-return sort of business. But with all the "smart money" on crazy startups impacting everyone's salaries, the rents, and the news cycles, it changes things. If you do go ahead with it, you might be tempted optimize your business at least partially for a potential acquisition and spend more on generating hype than on the fundamentals. Or you might get such a compelling offer from one crazy, poorly-proven but well-funded and well-connected startup that you forgo your perfectly viable plan entirely. So, the odd politically-motivated acquisition or funding shouldn't make you feel bad, but the cumulative effects can be suffocating for sure!