Photo: Silbermann via Facebook
UPDATE: SV Angel’s David Lee tells us his firm will not be buying stock from early employees, despite TechCrunch’s earlier report, which has now been “clarified.” Smart move by SV Angel.
EARLIER: TechCrunch is reporting that SV Angel will invest $30 million in Pinterest at the same $1.5 billion valuation of its last round of financing.
The $30 million will give SV Angel’s LPs secondary shares of Pinterest, buying about 2% of the company from early investors and likely some employees.
The amazing thing: Pinterest has yet to generate a dollar.
Sure, it has 28 million monthly visitors according to ComScore. It generates billions of monthly page views.
It’s also easy to see how Pinterest could make money. Advertisers would likely pay for featured photos, which would be endemic to the look and feel of the site. Or Pinterest could charge for traffic referrals and probably make a killing.
But right now, Pinterest hasn’t implemented any sort of money making feature. So early investors and employees are getting big fat checks with zero validation from a revenue-generating stand point.
We’ve seen investors do this before, letting people run away with millions before a real business is made, and it doesn’t always go over well.
Kevin Rose was able to get liquidity for Digg, and that ended in a $16 million firesale to The Washington Post, LinkedIn and Betaworks.
But apparently investors haven’t learned their lesson, or they just don’t care. Let’s hope it goes better for SV Angel and Pinterest than it did for some of the others.