Startups: money can’t buy love, or usage

With the hottest startups raising big money from investors, and founders and early employees of some of the most successful cashing out some of their equity to the tune of millions, it’s no surprise that so many entrepreneurs and wannabe entrepreneurs are taking the plunge and starting companies that they hope could be the next big thing.

Building a successful company, of course, is tough, and the odds aren’t favorable. Despite the hot market, a growing number of observers believe that we may be in the midst of a bubble which may not be as big as the first, but which could still create significant pain for entrepreneurs and the startup investment community.

The cult of the entrepreneur and ‘entrepreneuritis’

If you’ve been paying attention to the massive valuations being given to
companies like Facebook and Twitter through secondary markets and the
easy money that’s being lavished on new startups in Silicon Valley these
days, you’re not surprised at the latest generation of entrepreneurs
seeking to become the next Mark Zuckerbergs.

Bubble or not, good times are here again for the time being, and this
time around, the good times have built up a new phenomenon: the Cult of
the Entrepreneur.

The new web bubble

Yesterday, AllThingsDigital reported that Twitter has raised a huge $200m round of funding lead by top-tier VC firm Kleiner Perkins. The funding round apparently values Twitter at a whopping $3.7bn.

Earlier this month, group buying leader Groupon reportedly turned down a massive acquisition offer from Google. And on an almost weekly basis now, we learn that investors on secondary markets are pushing the value of Facebook pre-IPO stock up; the world’s largest social network is, to investors buying shares on the secondary market, now worth approximately $50bn.

Digg’s demise: are VCs and founder cash-outs partly to blame?

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.

Digg’s painful lesson: take the money and run while you can

At one point in the no-so-distant past, Digg was one of the hottest
startups on the internet. The Web 2.0 boom was in full swing, and Digg
and its founder Kevin Rose were the poster children for the next
generation of companies that would ride the wave to fame and fortune.

Digg, of course, rose to popularity by providing a platform that
democratized the news. Why rely on editors to determine what’s
important and what’s not?Let the wisdom of the crowd works its magic.
It was a simple idea, but a powerful one.

Are super angels conspiring against entrepreneurs?

Startups looking for funding increasingly have a new class of investor
to pitch: super angels. These are individual angels who have raised
money from others in the hopes that their smallish funds will serve as
the basis for an investing model that merges the best of the angel and
VC models.

The value proposition to entrepreneurs looking for funding: we’re as
nimble and friendly as angels, but we have more money available if we
decide to make a big bet. But is this all a facade?

Are investors wising up about platform-specific startups?

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.

Five ways to finance your new business

Starting a new business isn’t cheap. Even on the internet, I’ve seen
more than a few entrepreneurs experience surprise when they start to
realize how much it costs to get a venture off the ground.

Making sure your new business is well-capitalized is an important part
of achieving success. For that reason, it’s important to ask the
question: how much do I really need and where am I going to get it?

Just-Eat gets big money for fast food

Just-Eat, a company that serves as an online ordering provider for takeaways and restaurants, has just raised £10.5 million from prominent European VC firm Index Ventures.

It’s the first institutional funding for the UK-based startup, which has 6,000 takeaway and restaurant partners throughout Europe.