Posts tagged with 'Venture Capital'
Bad luck to Andy Cockburn and the Wigadoo team, following the news that it is closing down.
I really liked the Wigadoo model, and so did the likes of Brent Hoberman, who backed it. Wigadoo basically helped people to go Dutch online, for group outings such as events. So rather than having one person pay for four tickets, each person could chip into a central pot.
Simply put, the company ran out of time and money, and the appetite from the investment community wasn’t there to issue a new round of funding to take the business forward.
The current state of the financial markets has made it very difficult for startups to go public. Even startups with significant revenue and bright futures have no guarantee that they'll be able to go public anytime soon.
The dismal IPO market is taking its toll on venture capitalists, who invest in companies that they expect, if successful, will be liquid within some years.
It's not the best time to be an internet entrepreneur if you need funding. Thanks to a global recession, investment is pretty hard for most new startups to come by.
In the United States, which has the most robust VC market, investments by VCs plummeted in Q1 2009, reaching their lowest level in 12 years. VCs are focusing on their existing investments, being far more conservative when it comes to making new investments and are increasingly asking more of entrepreneurs, both in terms of investment criteria and deal terms.
The IPO market for technology startups seems all but shut these days thanks to the recession and financial system meltdown.
The bar has been raised very high; much higher than most tech startups are confident they can reach.
It may be a tough time to raise money if you're a young startup but that doesn't mean that funding isn't out there.
Bit.ly, the rockstar URL shortening service that we've profiled on the Econsultancy blog before, proves that; it just managed to raise $2mn from private investors.
Everybody knew that the economic crisis would have a profound impact on VC-backed technology startups. Many that had been able to raise lots of funding when times were good focused on growth instead of revenue, grew headcount rapidly and planned for M&A levels and IPOs that were a part of an economy that is now a fading memory.
With many VCs unwilling or unable to continue supporting portfolio companies that haven't found a way to support themselves, it was only a time before waves of startups started closing their doors and selling themselves at firesale prices as they ran out of cash.
M&A activity and investments in the interactive ad industry
declined in 2008 according to a new report issued by Petsky Prunier.
Deals were down 29% and acquirers and investors spent five times less than they did in 2007.
Who said that funding wouldn't be available to startups in the downturn?
Balderton Capital, which was formerly Benchmark Europe, made $140mn
when portfolio company Bebo was sold to AOL and a small fortune when
another portfolio company, MySQL, was sold to Sun. Its other
investments have included Betfair, the UK's most popular betting
exchange, and Yingli Solar, a Chinese solar company that is now public.
With the New Year right around the corner and this being my last post for the year, I figured it was time to go on record with my predictions for 2009.
The last half of 2008 has been interesting and changed the dynamic in the internet economy as financial markets collapsed and the global economy faltered. This will set the tone for 2009.
Paul Graham is one of the more interesting personalities in the American startup scene today.
Recognizing some of the flaws inherent in the venture capital model as it relates to consumer internet startups, he launched YCombinator.