Ross Levinsohn: From Big Rounds to Down Rounds
Back in December, Ross Levinsohn was quoted by PaidContent as saying:
Shopping: When I asked if they’re running into companies eager to sell now in case things turn sour, Levinsohn said it was just the opposite. “I’m actually amazed by it. A year ago … there was more desperation to sell.” The Facebook platform initiative and, to some extent, OpenSocial, turned that around, adding distribution to companies that once were only features.” They now have tens of millions of users and are raising money at huge multiples—hundreds of millions of dollars—and they’ll get it.”
Facilitatr: You Need It, Our Community Gets It
For some startups, VC money may be harder to come by in Silicon Valley but that didn’t stop Pablo’s Place from closing its $12 million funding round in less than a month. So I’m back pitching another innovative service that square VCs won’t touch but really private equity will.
The Problem
Don’t Batten Down The Hatches on a Shit Business
As the realities of the current economic landscape become apparent to even the completely most uninitiated, more venture capitalists are recognizing that tougher times lie ahead.
While tough times are never good for the fairweather founders that usually flock to Silicon Valley when money is being handed out on Sand Hill Road like it’s going out of style, I pointed out in a recent post on E-consultancy.com that tough times can create opportunity for smart, serious entrepreneurs.
In a post on his blog, venture capitalist Fred Wilson discussed the tough times ahead and commented:
Web 2.0 “Investment Boom May Be Peaking”
Common sense is back in vogue. From the increasing questions about the Facebook hype to the realization the Old Media isn’t dying to the growing consumer and advertiser dissatsifaction with user-generated content, it’s clear that common sense is starting to make a comeback, perhaps fueled in part by the best antidote to a kool aid-induced high - a stark economic reality.
Yesterday produced a sign that even those who typically lack common sense (venture capitalists) may be starting to recover from their stupors: Dow Jones VentureSource released 2007’s Web 2.0 funding figures which suggest that the Web 2.0 “investment boom may be peaking.”
Play Poker, Win VC Funding
What would you do to get VC funding? If you’re not playing poker in Silicon Valley, you might want to start. A recent Wired article details the chronicles of 28 year-old Zach Coelius who has worked his way into Silicon Valley’s inner circles by playing poker. His new startup, Triggit, just raised $500,000 from Bay Partners, the firm that never received the memo announcing that the New Economy was a sham.
This time, however, they’re investing for all the right reasons:
Virtual Events Provider Raises $10 Million, Misses the Point of Events
Unisfair, a Menlo Park-based startup that hosts events such as conferences, trade shows and job fairs in virtual worlds, has raised $10 million in funding from Norwest and Sequoia. Unisfair hosted more than 400 virtual events for companies like Cisco, Cognos and Nielsen over the past year and a half and appears to have a real business model.
Because the company generates revenue, you’d expect that Drama 2.0 would be a fan. Wrong. I agree with Paul Glazowski that this is a ridiculous business, but for a much different reason: Unisfair misses the entire point of corporate events. The companies that host virtual events in Unisfair’s corporate Second Life are doing a major disservice to “attendees.”
Surprise: Rich Guys from Google Want to Become Investors
The New York Times has published an article that discusses the increasing number of Google employees who are leaving Google and deciding to become investors. Some are becoming angels, some are joining VC firms and others are raising their own funds.
TechCrunch has proclaimed “Here Comes The Google Mafia” in reference to the PayPal Mafia that has carved out a niche in Silicon Valley (I hear they control all of the racketeering east of Sand Hill Road). While the legion of Google investors have not yet organized in the same way that the PayPal Mafia has, that could be changing. Former Googler Aydin Senkut, who left Google in 2005 and has been an angel ever since, stated “We are planning to bring all the ex-Googlers who are starting companies and investing in companies together to tighten up the network.”
Edgeio: An Interesting Look into the World of VC-Financed Startups
The auction of classified listing service Edgeio provides an interesting look into the world of VC-financed startups. Edgeio received $1.5 million in an angel round and $5 million from Intel Capital and Transcosmos Investments in a series A round. Edgeio’s demise, and the fact that the assets of a company that raised $6.5 million are now being auctioned with a $250,000 starting bid, have unsurprisingly sparked a lot of negative commentary, including some directed at Edgeio’s co-founder Michael Arrington, editor of TechCrunch.
The Overfunded: Why Too Much Money Is a Bad Thing
A cardinal sin for any startup when raising a round of funding is to not raise enough money. There are few things an investor hates to hear more than “We’ve run out of money” before the milestones that were to be achieved with that money have been accomplished. As such, it is crucial that entrepreneurs try to accurately project how much money their startups need and to raise an amount at least somewhat greater than that since any experienced entrepreneur knows that expenses are almost always underestimated and revenues are almost always overestimated.
Glenn Kelman Proves Sanity Does Exist in Silicon Valley
Glenn Kelman, the CEO of Redfin and co-founder of Plumtree Software, wrote a great guest piece about entrepreneurship on TechCrunch. He focuses in on the serial entrepreneurs that Silicon Valley VCs have showered with money in this latest boom:
keep looking »The second coming of the Internet bubble, Web 2.0, has in some ways been the love-child of Entrepreneur 2.0 — wealthy from his 1990’s success, restless from his time off. Venture capitalists have lined up with funding.
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Drama 2.0 spikes the Web 2.0 kool aid by providing a critical analysis of Web 2.0 startups and the impact of Web 2.0 on the media industry. Other topics are explored when Drama 2.0 has a slight buzz. Read more about the Internet's version of Keyser Söze here.
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