|
I love these posts, ones that deal with understanding the investment side of startups. With that said, I hope you could reply because I'm an amateur in this field compared to you [quick google search] and would like to learn from this discussion. - who are you going after here? In your post the people I see are the unsophisticated investors who go for emotion/speculation rather than business perspective. Those that say with their gut "I love this product, it's so influential, therefore it's worth $50/share" and do off-the-cuff calculations "Facebook is priced at X so Twitter is around X, too" instead of doing hard research. One can see how it's bad to have these kinds of people involved in a relatively small field (ie VC), but again, your headline is towards startups and not the investors just noted. - don't startups stand to profit most from these valuations? The problem I see is in having the aforementioned investors. If we have people running around trying to get a slice of the pie, it looks like they'll pump-and-dump. They'll pump their cash into whatever startup seems to have a chance of opportunity and then walk out when it's profitable enough. Win/win, except that means the investors don't really care what the company is doing or up to, they just want to profit. - with what I just mentioned, startups stand to profit because more opportunity is available. The downside I see is there being a higher chance of shallow investments. When investing in a company, you want to really understand it and know it, but with these valuations and profits, it seems the headline shouldn't be "Why Twitter's IPO is Bad for Startups" but "Why Twitter's IPO is Bad for Sophisticated Investments." note: It's pretty difficult trying to write out thoughts on here, so hopefully I made some sense. If not, just ignore it as beginner's mind. |