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BusinessWeek: Tech's Best Young Entrepreneurs

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Re: BusinessWeek: Tech's Best Young Entrepreneurs

#3

Post by iamelgringo »

First off, congrats to the guys who made the list. It's hard work being an entrepreneur, and I'm glad that you guys are getting some good press.

But, I do have a problem with how it seems that these businesses are being selected. It seems that the level of funding that these people raised is used as a hallmark of how good the entrepreneur is. Isn't the mark of a good entrepreneur how much they can do with how little?

I can understand why a video company like Video Egg might need a high capitalization. Bandwidth charges for video streaming are high. But, I'd still balk at taking $27 million in funding.

Etsy--31 million in funding. Granted, the company has 1 million users and 75,000 sellers. But really, 31 million dollars! What does an e-commerce site need 31 million for?

I've actually begun to see taking large sums of VC money as a competitive disadvantage. If these companies take $20-30 million in funding, the VC's are going to push for a 10x return. That means that their investors are wanting a $200-300 million exit. And, even at those rates, I'd imagine that the founders shares are quite diluted by that point.

And, I'd guess that the chances of getting a $200-300 exit are a lot slimmer than getting a $5-6 million exit. For details Google "Digg acquisition": http://www.google.com/search?hl=en&safe=active&clien...

Re: BusinessWeek: Tech's Best Young Entrepreneurs

#5

Post by freax »

dbreunig wrote: post #2

RockYou? Really?

F Me. $15 mil for adding tinsel to your MySpace? And "RockYou is lining up a new round of funding to stay sharp.".

Etsy: $31.6 mil for a swapmeet just for handmade crafts.

When people take that much buck for so little bang it doesn't seem like they are interested in ROI or making it big so much as having a jobs program for them and their buddies.

Auctomatic sold for what probably amounts to a few months' burn rate for these suckers and still made their founders millionaires. How are these guys with 20 or 30 mil invested going to find a buyer that makes them a profit?

By the strict definition of entrepreneur (assuming the risk), that title goes to the VCs. When the venture tanks it's not going to be the founder who's out $30 mil.

Not a lot of technical wow in that list. Drupal probably leads by a good margin.

Re: BusinessWeek: Tech's Best Young Entrepreneurs

#6

Post by jgrahamc »

freax wrote: post #5
dbreunig wrote: post #2

RockYou? Really?

F Me. $15 mil for adding tinsel to your MySpace? And "RockYou is lining up a new round of funding to stay sharp." . Etsy: $31.6 mil for a swapmeet just for handmade crafts . When people take that much buck for so little bang it doesn't seem like they are interested in ROI or making it big so much as having a jobs program for them and their buddies. Auctomatic sold for what probably amounts to a few months' burn rate…

> Etsy: $31.6 mil for a swapmeet just for handmade crafts.

I'm assuming that your italics were meant to indicate that you think this is a silly idea. But what you probably have to consider is the size of the handmade craft market in the US. Then consider the entire world-wide market. It's probably very large. And Breyer @ Accel is no fool.

Re: BusinessWeek: Tech's Best Young Entrepreneurs

#8

Post by freax »

jgrahamc wrote: post #6
freax wrote: post #5

Earlier quoted context omitted.

F Me. $15 mil for adding tinsel to your MySpace? And "RockYou is lining up a new round of funding to stay sharp." . Etsy: $31.6 mil for a swapmeet just for handmade crafts . When people take that much buck for so little bang it doesn't seem like they are interested in ROI or making it big so much as having a jobs program for them and their buddies. Auctomatic sold for what probably amounts to a few months' burn rate…

> Etsy: $31.6 mil for a swapmeet just for handmade crafts. I'm assuming that your italics were meant to indicate that you think this is a silly idea. But what you probably have to consider is the size of the handmade craft market in the US. Then consider the entire world-wide market. It's probably very large. And Breyer @ Accel is no fool.

You have to judge the idea, not appeal to authority. Investors make mistakes most of the time!

> But what you probably have to consider is the size of the handmade craft market in the US. Then consider the entire world-wide market. It's probably very large.

That's every business plan ever. "Look how huge this market is! If we could just get one percent, why..."

It's like Ali G's pitch. "Zen" (Venn) diagram of "People who like ice cream" intersected with "People who has hands". Voila, the Ice Cream Glove.

http://www.youtube.com/watch?v=48TR0vUPQCs

Re: BusinessWeek: Tech's Best Young Entrepreneurs

#10

Post by optimal »

iamelgringo wrote: post #3

First off, congrats to the guys who made the list. It's hard work being an entrepreneur, and I'm glad that you guys are getting some good press. But, I do have a problem with how it seems that these businesses are being selected. It seems that the level of funding that these people raised is used as a hallmark of how good the entrepreneur is. Isn't the mark of a good entrepreneur how much they can do with how little?…

Yeah, it's like BW is blinded by the numbers--that money's not a personal gift to the founders (from "holed up alone in a room for 100 hours a week" to "Funding: $17.5 million"). Regardless, it's a validation of their efforts.

True success will be determined years from now based on the outcome of these investments.

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