Meet the newest billion-dollar internet startup: Groupon. Russian firm Digital Sky Technologies, which has provided big funding for other big startups in the social space, namely Facebook and Zynga, has led a $135m investment in the young but profitable Chicago-based startup. The valuation: a cool $1.2bn valuation, which some observers believe is still "cheap."
Groupon is attracting a lot of attention these days, and for good reason. The U.S.-based group shopping service has fueled a worldwide gold rush in the group shopping space.
When an entrepreneur gets an idea for a new business, one of the
earliest questions that he or she asks is: how big could this be?
It's an important question. After all, how 'good' an idea is likely
depends on how big the potential market for it is. That's especially
true for entrepreneurs who intend to seek outside funding.
In response to Jason Calacanis’ war on individuals and organizations
who charge entrepreneurs money to pitch their startups to investors, I
made the point that the biggest scam perpetrated on entrepreneurs is
the promotion of the idea that raising money from professional investors is
something entrepreneurs should do if they want to be successful.
The truth of the matter is that angels and VCs are great, if you’re a member of the ‘startup establishment’, as Calacanis is.
Jason Calacanis has declared war on organizations that charge
entrepreneurs to pitch investors on their startups. With "boiling
blood", he used a post on his blog this weekend to shame these
organizations and to threaten them with extinction.
Singled out: a number of groups, including the well-known Keiretsu
Forum. All of which charge entrepreneurs fees to present their
businesses to "rich angel investors" who Calacanis believes are
exploiting "poor" entrepreneurs.
Popular microblogging service Twitter is the Silicon Valley equivalent of a Hollywood celebrity that the paparazzi can't stop following. And it doesn't look like that's set to change anytime soon given that the company may be on the verge of raising another massive round of funding.
According to TechCrunch's Michael Arrington, multiple sources are indicating that Twitter CEO Evan Williams disclosed a new $50m (give or take) round of funding at a company meeting. And the valuation for the round will be four times the previous round's $250m valuation. Yes, $1bn.
There are signs that the global economy may be stabilizing and recent M&A activity in the tech sector offers hope that tech will be closer to the front of the pack. But that may not be much consolation to many UK startups that are hurting for cash.
According to Jonathan Kestenbaum, CEO of the National Endowment for Science, Technology, and the Arts (NESTA), as many as 800 young companies face an "unimaginable dilemma" that threatens their survival. The cause of this dilemma: a frozen market for venture capital.
As far as VCs go, Sequoia Capital is a legendary firm. The startups it has funded include Apple, EA, Yahoo, YouTube and a little company called Google.
That last company seems to be the inspiration for Sequoia's newly-redesigned website, which now sports little more than a search box on its homepage.
PROfoundersCapital is a venture capital fund established for entrepreneurs in the digital media space, and backed by investors including Brent Hoberman and Michael Birch.
I've been talking to General Partner Rogan Angelini-Hurll about the aims of the fund, and what he will be looking for in entrepreneurs seeking investment...
Less than a year ago, it would have been hard to imagine that Google would be trudging along, eking out bottom line growth primarily by cutting expenses. And it would have been hard for some to believe that the hottest startups would seemingly be no closer to solving their monetization questions.
The reality: the internet economy is a lot like the rest of the global economy.
If you're an entrepreneur looking for VC funding, times have been better. The dour economy has caused many VCs to tighten the financing spigots and raise their standards.
But that's only part of the story. The truth is that venture capital, like so many industries, is undergoing some major changes. Marc Andreessen, a veteran entrepreneur who is most widely recognized for helping create the Mosaic web browser and founding Netscape, is hoping his entrepreneurial prowess that has served him so well in creating startups can give him a leg up in the world of funding them.