Michael Arrington and Fred Wilson have both blogged in depth about the value of their communities, and they’re right.
Tonight Tech Crunch posted a follow up on Scribd - the YouTube of documents (whatever that means) - mentioning that Scribd (who had secured $4M in VC) was facing competition in the form of Docstoc.
Shortly thereafter, a bunch of commentors quickly added their two cents, and listed a bunch of competitors to these two: ThinkFreeDocs and eDocr to name a few (can I buy a vowel, please?).
Anyway, I never understood Scribd’s business model (then again, many said that about YouTube, MySpace etc). What made Scribd even nuttier was the insane valuation it got in the $4M round. I wrote about it earlier.
But considering that within minutes, if not seconds, a bunch of commentors mentioned a couple of competitors to the #2 in the space, with all due respect to VCs, can someone tell me if they still do any due diligence? Or, do they just plunk down money without doing much research?
I know that sounds unfair, but then consider more odd cases?
Jobster is very promising as an HR social network. But then the CEO seems to carry some baggage. Then, if that’s not enough, it only takes a few minutes to realize that video resumes are not that great of an idea when you consider that it’s a discrimination lawsuit waiting to happen. That means risk. VCs say they’re risk takers, but that seems rather risky to me, no? (Full disclaimer: a couple of companies in the video resume space have asked me to consult them).
Jobster’s not alone, Lifelock also had some founder issues, and Bessemer seems to have overlooked it. What does that say?
It gets better. I met Fanlib’s CEO when I was in LA and he seemed like a very nice guy, but when the site launched, a lot of people pointed out the obvious: trying to profit from fan fiction is great in theory but problematic in practice. There are many reasons for that, I won’t get into them all, but Fanlib’s backers are a who’s who of financiers. Yet the obstacles it will face on many fronts make me wonder: what were the investors thinking?
What’s happened to the craft of investing in startups?
This past Friday, I read about ComVentures allegedly screwing their second portfolio company in less than a year. What the…?
And if you thought this was dissipating, think again, just last week, DAG Ventures, dubbed Coattail Ventures, raised a $477M fund, suggesting that me-too investing is certainly in vogue.
Anyone care to comment on this? Or will we simply shove our heads in the sand?
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo Newsletter
