Startups with vague ideas rather than detailed business plans are being showered with money by investors. Are we on the way to Dot Bomb 2.0?
That's the question asked by Jason Freedman of 42Floors, who struggled for funding in the dark days of 2009. In "Did everybody see what just happened? The pendulum has swung" he talks about a recent demo day where inexperienced investors were throwing money after quick verbal pitches. "No business plans, not even pitch decks this time." Talk of Facebook at $100 billion and the recovery may have overheated the market, perhaps into a bubble about to burst.
A similar story comes from Difu Wu in his article "Beware Of Technology Bubble 2.0: Lessons From An American Sucker." Since the technology bubble and crash was 10 years ago, people have forgotten what happened. But history repeats, and "more and more mediocre companies are going public," says Wu. Is the market growing or the clock ticking?
Yeah...I see what just happened...we are back in 1999. Enjoy it while it lasts.canterburry on news.ycombinator.com
a tremendous amount of time, money and intellectual capital is being wasted on whimsy. 1500 on-line dating sites??? Enough already with this sort of stuff.IncomeYield on seekingalpha.com
Makes me a little envious of guys, still a bit green, locking in big money fast largely thanks to their
94301 zip code ;-)Jeff Smith on 42floors.com
Bad things always seem to happen when the money chases the startup.subwindow on news.ycombinator.com
The lack of consistency and the lack of competence in the investor community is sadly - too apparent.ProfessorSabena on 42floors.com
Things are under control
The Jobs Act is why. The Angels are terrified you'll be able to go out and raise money without them now that crowdsourced funding is legal.Musicgrinder on 42floors.com
today there is no Excite or Webvan amongst them. Good, solid, aps for the iphone or social networks that will share photos and allow excited users to write microblogs with their smart phones.Atillahn on 42floors.com
Understand you are in a bubble, and you may be forced to play by the rules of a hot market.danbmil99 on news.ycombinator.com
We're not in a technology bubble. If anything, we're in a "value bubble". Good luck.Modernist on seekingalpha.com
Wish more people got this but until they live through a full cycle themselves, I doubt they will fully appreciate it. I expect foolish behavior to continue for a while.honam on 42floors.com
Is "dumb money" back in the tech market? How do those "dumb" people get enough money to invest in startups?
Now read this: