Another Sign Bubble 2.0: VCs Begging To Invest In Startups That Don't Need It
from the take-the-money-and-run...-or-just-run? dept
After the bubble burst, there were some who complained that VCs were no longer investing in early stage startups. In fact, (since governments are always a bit late on these things), even now some politicians are worried that VCs won't invest in enough early stage deals. However, smart entrepreneurs just realized that this shifted things around. Capital was suddenly expensive... but thanks to massive layoffs, labor was cheap. Thanks to open source technology, software was cheap. Thanks to high speed, always on internet connections and good communications tools, workers could work from home efficiently, and so office space was cheap. It's all about focusing on what's cheap at the moment. So, some good startups thrived, despite the lack of venture capital money. However, during the last bubble many VC firms raised an awful lot of money that they've been sitting on. While they returned some of it, many of the remaining funds are reaching deadlines by which they need to be invested. That's causing a huge new glut of easily available cash from VCs to startups that probably don't need the money at all, since they were built for conditions when investment capital is expensive. Many in the internet world are trying to convince people that there's something fundamentally different this time around and that it's "Web 2.0." It's nothing different -- it's just a progression. The difference is that venture capitalists have a lot of money that needs to get invested, fast. Some startups are taking the money, believing that if money is available (especially cheap money), you take it. Others are taking money and just socking it away in order to use the connections the VCs add. Either way, it will be interesting to see how some of these firms move forward. In the first internet bubble, a big problem was that many entrepreneurs started viewing venture capital money as revenue -- and therefore, it was all about raising more, rather than building a real business. The money was distracting and often took good ideas off course. If today's entrepreneurs can resist that temptation, put the money in the bank and stay focused on building good businesses, then perhaps that's a good thing. However, having lots of money around can often do funny things to startups.
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Cheap Money
You say having lots of money around can do funny things to startups...the scary thing is that it can do funny things to everyone.
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Re: Cheap Money
You mean like create prosperity and wealth?
Sadly, we live in a country where poor means having analog cable,
rear-projection big screen, non-progressive scan DVD,
a 2 yr. old Altima/Civic/Scion, PS2, dial-up internet, iPod shuffle, and fake Gucci glasses.
Arrgghhh...the humanity!
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Re: Cheap Money
I agree with you that the poor in this country have it pretty well off compared to most in the world, or in history, though I don't know how that relates to my point.
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Re: Cheap Money
Isn't it funny that the people who often talk about 'survival of the fittest' are the kind of people who have never had to "survive" anything?
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Re: Cheap Money
Vague statement with many layers of interpretation on "the game".
Seriously--life of a start-up is not glamorous it's a lot of hard work but an upgrade from corded phone>cell phone> blackberry and social network is vital for growth. Perhaps its the sense of self-value and the desire to fill the appetite of human being social creatures.
Although I'm a female in IT I am forgiving of you alpha males who do not understand the whole unnecessary need of Gucci bags. It's like why would you want a Rio 500 when you can upgrade to a "Apple will fuck me over with another toy launch Nano". In conclusion, you'll probably never will understand the Gucci bag deal... so don't sweat it.
However if I have 1 Billion dollars I would be empowered in helping society rather than spend it on Gucci bags.
In the US we have blinders on the make us desire for commodities within our reach. I work for a start-up and don't make jack but the compensation is the hope and desire of being valued from my contribution and the association of a potential greatness!! Anywhoo... speaking from a young bushy tail RCG that's my 2cents to spare.
p.s.
logo whores are very tacky I personally prefer Bottega Veneta. Qualify leather and craftsmanship is key.
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Re: Cheap Money
> unnecessary need of Gucci bags. It's like why
> would you want a Rio 500 when you can upgrade to
> a "Apple will fuck me over with another toy
> launch Nano". In conclusion, you'll probably
> never will understand the Gucci bag deal...
> so don't sweat it.
According to the stereotype:
- Men usually want things that they can play with and makes their life easier. It's about fulfilling the go of our inner child. It's about tools that do cool things.
- Women usually want things as a personal reinforcement of their social rank and a way to show off to others. It doesn't have to be something of utility either (ie jewelery) as long as the basic meaning is conveyed. If women couldn't show off their Gucci bags and jewelery, then there would be no point to having them. But with a guy, he doesn't care about that; even better, because he gets more alone time with that toy/iPod/PSP/car/etc.
But this is a stereotype. Nowadays a lot of men are starting to become more trend/seasonal consumers like women. The marketing folks just needed time to figure out just how to pitch it to create a demand.
Quality is hard to assess, because its an abstract concept. Quality usually means that it will last longer, meaning that the only way for you to really say something is good quality is if you've had it for that long. Otherwise, quality is something that brands try to give impressions of through marketting and design. Take Apple iBooks, for example: terrible quality, they break often, have malfunctions and the casing/keyboard wears out within half a year, yet the perception of quality exists. But, in any case, to say something is better quality can be used as snobbery: "I buy X, because I only like quality"... subtly meaning that anyone who doesn't, can't appreciate your sense of quality and is less refined. I see that happen a lot. It's pretty stupid, but then most things in the socialite world are.
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Re: Cheap Money
Stereotypes exist and there are exceptions about the Men vs. Women drivers of what they find pleasing and meets their needs. Majority of men and women alike are all marketing victims.
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however if by the aforementioned standards the use of analog cable, the lack of a big screen (even projection), no PSP, PS2 or Xbox to mention a few, my newest car is 4 years old (the wife's) and mine is 8 years old... sign me up for welfare so i can live like the poor.
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busty teens sleeping
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