Comments on: “Silicon Valley Start-Ups Awash in Dollars, Again” http://www.robhyndman.com/2007/10/17/silicon-valley-start-ups-awash-in-dollars-again/ any technology distinguishable from magic is not sufficiently advanced Tue, 23 Feb 2010 15:33:03 -0800 http://wordpress.org/?v=2.9 hourly 1 By: Kevin http://www.robhyndman.com/2007/10/17/silicon-valley-start-ups-awash-in-dollars-again/comment-page-1/#comment-79656 Kevin Wed, 17 Oct 2007 14:34:34 +0000 http://www.robhyndman.com/2007/10/17/silicon-valley-start-ups-awash-in-dollars-again/#comment-79656 One of these new funded companies ($10 million in vc money) was asked about their business model - where the revenue would be derived from? The answer was that they were a Web 2.0 company that will be attracting a large amount of traffic because of the value they add consumers. To me, that sounded like Web 1.0 of the late 90's. And like you I called that the greater fool theory. Like baseball teams in the States that lose money, you count on the greater fool who wants to be an owner of a sports team buying you out. With VC it's who will be the greater fool investing more money at a higher valuation. One of these new funded companies ($10 million in vc money) was asked about their business model – where the revenue would be derived from? The answer was that they were a Web 2.0 company that will be attracting a large amount of traffic because of the value they add consumers.

To me, that sounded like Web 1.0 of the late 90’s. And like you I called that the greater fool theory. Like baseball teams in the States that lose money, you count on the greater fool who wants to be an owner of a sports team buying you out. With VC it’s who will be the greater fool investing more money at a higher valuation.

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