Say Hello To The Vapor Billionaires

from the can-we-count-please? dept

While economic bubbles may not be so bad, it is funny to see how quickly reports of great wealth from a bubble translate into a sudden influx of folks who don't understand a space at all, but just want to cash out. It happened during the last bubble around 1999 when all of the reports of crazy IPOs were happening, making lots of people paper millionaires (many of whom never turned that fake paper into the green kind that matters). Now, it seems that with the lack of suitable IPOs, we're going to be hearing a lot more stories about vapor millionaires. It started back in August with Business Week's silly cover story claiming that Digg's Kevin Rose had personally made $60 million which was flat out false, and now it appears that Rolling Stone is following suit. VentureBeat points us to a Rolling Stone story about "the baby billionaires of Silicon Valley." There's just one problem: none of the people they list is a billionaire. Outside of the YouTube founders (who are worth a few hundred million on paper) none of the others are even worth very much on paper. They all founded or run small private companies that have yet to be sold to anyone and there's no telling what they're worth, if anything. Some of the guys profiled are very nice guys who we've met -- and they may eventually be able to cash out with plenty of money -- but to claim they're billionaires (or even millionaires) isn't even remotely accurate. They don't even have the money on paper -- other than in this Rolling Stone article. It truly is the rise of the vapor billionaire -- and the problem is that stories like this will just send out the signal for more folks to show up planning to make their own billion, not even recognizing that the original billionaires didn't even exist in the first place.
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  • identicon
    Bob3000, 9 Nov 2006 @ 4:58am

    Digg

    Kevin and Alex from Digg still laugh about that in their podcasts. Kevin lives in an apartment and drives a Golf.

    link to this | view in chronology ]

  • identicon
    dataguy, 9 Nov 2006 @ 5:39am

    You are stressing the wrong point

    Anyone who makes investments of time or money based on a tech article in Rolling Stone will reap what they sow. I don't think that is anything for us to worry about.

    Misleading tech articles in the general media are not new but sometimes they are worth pointing out. I'm not about to feel sorry for greedy people that invest without a clue.

    link to this | view in chronology ]

  • identicon
    edstamos, 9 Nov 2006 @ 5:49am

    hmm...

    i think this would be a good way to pick up chicks. get some hot gold-digger to put out, thinking you're a millionaire because RS says so, then ask her to foot the bill at mcdonalds

    link to this | view in chronology ]

  • identicon
    cvanallen, 9 Nov 2006 @ 6:56am

    Funny... but not a bad thing.

    Even though these people are labeled billionaires and the normal person is seeing that it is possible (in theory) it will provide a drive and an opening in the technology market. We have seen such an upswing of Net Stocks and companies in the past 4 years that articles such as the RS (although false and misleading) is providing the type of coverage to get investors back to not being so gun-shy of investing in anything that relates to the dot com industry. I personally watched my relative go from having 2.8 Mil shares at $22 and a new CEO drove the stock down to $.35 before selling the company for $8 Million dollars. That's a drop from $61.6 million dollars to $980,000. If I took a hit like that there would be a possibility of also taking a bullet to the head.

    Any coverage showing that our industry is blooming is great coverage. But that's just IMHO.

    link to this | view in chronology ]

  • identicon
    yeah dog, 9 Nov 2006 @ 7:53am

    um, i think the word "baby" implies that they are going to be billioanires, as in, something that will happen in the future-

    link to this | view in chronology ]

  • identicon
    yeah dog, 9 Nov 2006 @ 8:03am

    um, i think the word "baby" implies that they are going to be billioanires, as in, something that will happen in the future-

    link to this | view in chronology ]


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