As an entrepreneur deciding how to spend a few intense years of my life building a new company I’m struck by a vexing decision:
Follow the trends of companies that are getting easily funded and have seemingly quick exits
OR
Enter a new category and try to solve some hard problems
It seems that trend spotting is the path that the broader investment / acquisition community is rewarding these days - just look at Viddy’s announcement today that their Series A round is valued at some $300MM. This is a company who describes themselves by saying; “Yeah, we’re like these other guys that just got bought for a billion BUT we do video”.
Here is an eye opening statement from Michael Carney:
The company’s $1.5 million seed round closed around April 2011 and, according to my sources, was priced at $16 million. That’s a 20-times multiple in just twelve months for a company that has not monetized to any significant degree.
Amazing stuff.
I recently attended a Fast Pitch Competition here in Los Angeles given by the Tech Coast Angels. Out of 170+ company ideas, eleven were chosen to present their concepts to a panel of savvy investors and entrepreneurs. The panel then voted on a scale of 1-10 who they thought was most fundable.
The winner?
A dating site.
Humph.
Let me say that I’m very happy the investment community is making an effort in SoCal. We have plenty of talent here and it should have local access to mentors and capital.
I was just underwhelmed that out of all the 170+ applicants the best, most innovative idea was a small pivot in an already tapped market.
Don’t hate the player – hate the game is perhaps the mantra of the day.
