Crowdfunding may soon be a reality in the United States, giving entrepreneurs and would-be mom-and-pop startup investors reason for celebration.
And make no mistake about it: crowdfunding could be one of the most significant changes to hit the startup world in a long time, providing entrepreneurs with a much larger market in which to raise capital for their companies.
When you think of Silicon Valley, you're probably more likely to think of young entrepreneurs risking it all on ideas that can change the world.
That image of a Silicon Valley driven by young, ambitious individuals is, of course, only partly true. There's plenty of gray hair in Silicon Valley, particularly on Sand Hill Road and in the hallways of some of the Valley's most profitable companies, like Oracle, Cisco and HP.
When Facebook filed to go public earlier this week, you can be sure that the excitement in the halls of Facebook's offices was palpable. After all, the company's wild ride is going to make a lot of people very wealthy.
But the excitement around Facebook's IPO isn't just being felt amongst Facebook's employees. It's creating increased excitement for technology entrepreneurs, some of whom hope their startups could be the next Facebook.
We may be in a bubble, but you wouldn't necessarily know it considering the latest generation of internet IPOs.
Groupon's stock is trading below its first day closing price, Zynga's stock closed below its issue price when it debuted last week and the market didn't seem too excited about the spin-off of TripAdvisor from Expedia.
So what gives? If everyone knows that the internet is the real deal, why aren't these new issues selling like hotcakes? Here are five reasons.
In 2008, just as the global economy was collapsing, one of the most storied venture capital firms in Silicon Valley, Sequoia Capital, gave a presentation that encouraged entrepreneurs to raise as much money as they could, and hunker down for a nuclear winter.
Three years later, the startup economy is zooming along. Many young companies large and small have been raising money at significant (and arguably exorbitant) valuations. A new breed of angel investor -- the 'super angel' -- has emerged, buoying the market for startup capital. And thanks to secondary markets for private company stock, founders and early employees at some of the most successful companies have been able to obtain liquidity.
But are the good times coming to an end, again?
Yahoo is still one of the largest consumer internet companies, and one of the most recognizable technology brands in the world. But it's also arguably one of the most troubled publicly-traded technology companies in the world.
In January 2009, the company hired Carol Bartz as CEO to change that. Bartz had previously led software maker Autodesk, and her successes there provided some hope to Yahoo and its shareholders that the company could be turned around.
But little more than two years later, Yahoo's board decided that progress, if any, hasn't been great enough, and yesterday fired Bartz.
When investing in or buying a company, taking a peek under the hood is all but required. Anything else, of course, is sort of like going to Vegas and betting a huge chunk of your retirement on black.
Generally, due diligence includes looking at a company's financials. From the top line to the bottom line, prospective investors and acquirers need to know how healthy a company is and where it appears to be headed. But when investing in or acquiring an online business, should investors and acquirers be paying more attention to the SEO profiles of the properties they're considering?
Is there a bubble in tech?
It may not resemble the first .com bubble, but the valuations being
given to some of the hottest internet startups, from 'mature' companies
including Facebook and Twitter all the way down to upstarts like Quora, is producing
plenty of skepticism.
Digg is dead. Sure, the company won't be disappearing today,
tomorrow or next week, but to anyone who lived through the first .com
bust, the writing is on the wall: the company's redesign woes and
yesterday's 37% staff reduction don't bode well for its future prospects.
For Digg to survive and thrive once again, it's going to have to beat the kind of odds that few companies do.
The platforms offered by companies like Facebook, Twitter and Apple
offer entrepreneurs some very compelling features. They often bring to
the table built-in audiences, and, in some cases, established business
For reasons like these, it's no surprise that a growing number of
entrepreneurs are building entire companies on top of a specific
platform. And it's no surprise that investors have flocked to back them.