Tuesday, October 6, 2009
Honey, I Shrunk the Start-Ups, Part II
A few comments about Dave McClure’s Sunday post encouraging entrepreneurs under 30 to sell at the earliest opportunity, from someone who was a founder under 30.
A few comments about Dave McClure’s Sunday post encouraging entrepreneurs under 30 to sell at the earliest opportunity, from someone who was a founder under 30.
About two dozen companies building applications on Facebook went fishing for cash from Silicon Valley investors on Tuesday.
The companies, ranging from music discovery software to mobile virtual worlds, have all received a small amount of funding from Facebook’s fbFund, a $10 million seed fund that Facebook and two of its backers–Accel Partners and Founders Fund–dole out annually.
As Silicon Valley’s stock-driven wealth machine sputters in the recession, technology start-ups are exploring new ways for employees to tap their holdings.
Silicon Valley venture capitalists–who invest in startups with the aim of profiting later when those companies go public or are sold–have found it tough to produce returns recently.
Startup executives and employees haven’t had it easy cashing out of their private company stock since the IPO and M&A markets, which typically provide “liquidity” and a route to riches, have been relatively moribund in recent years. Spotting an opportunity, several companies have sprung up in recent months to try and provide startups with new avenues to liquidity.
During the “Launch Pad” session, five start-ups took a grilling from developers, journalists and venture capitalists, then faced a crowd vote at the Web 2.0 Expo’s version of “American Idol.”
As attendees texted their votes, moderator John Battelle, founder of Federated Media Publishing, jokingly asked: “Want to have a dance-off?”
None were necessary. The techies in attendance were starry-eyed for all things mobile, picking Nitobi’s PhoneGap, an open-source tool for building mobile apps, as the People’s Choice winner. Life-tracking site zeaLOG was a close second.
You’ve probably heard how much the microblogging service Twitter can help your business, or that being on social-networking site Facebook can boost your company’s profile. But what you might not have considered is the potential danger in over-relying on these start-ups that could go out of business, get bought out, or close your account if you aren’t familiar with their Terms of Service.
By the end of 2008, venture capital had been officially declared dead. Start-ups were laying people off so fast that even TechCrunch couldn’t manage to keep up. University endowments and foundations, the source of the “capital” in venture capital, were hemorrhaging so badly from their public company investments that many long-time believers in “alternative assets” declared a moratorium on venture capital. And the IPO market was a distant memory. Good times!
If you could search your friends’ thoughts, interests, and activities, would that be a better search experience? In many cases, it would be. Searching for restaurants, books, or movies, would turn up recommendations from people you actually know.
One of the differences between big companies and start-ups is that big companies tend to have developed procedures to protect themselves against mistakes. A start-up walks like a toddler, bashing into things and falling over all the time. A big company is more deliberate.
It would seem we’ve got all the makings of a tech shipwreck.
In the past few days, Xerox, Yahoo and eBay each announced plans to cut thousands of jobs. Esteemed Silicon Valley VC firm Sequoia Capital is warning entrepreneurs that it’s time to batten down the hatches because the good times are over.
We have already seen tons of things people do on Twitter to help their business–marketing people selling staff, community managers engaging in various activities with their users, startups providing technical support, bloggers hunting for scoops and promoting their articles.
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