And yet again, all the quotes are from angel/early-stage investors complaining about high valuations.
Why are these people so very concerned? It’s making it harder for them to close deals and make money. The higher the valuation the more expensive the investments.
The Times didn’t bother to ask the people starting companies what they think, only the people investing in companies. Any entrepreneurs care to weigh in? You think we’re in a bubble? Do you care if we are?
Yes, these investors are more experienced and they can see bad things on the horizon, which is helpful for people starting companies. But, it would still be nice to acknowledge the real reason they’re worried about a bubble.
Anyway, here’s some of the best quotes from the story:
- Chris Sacca: “I think at the high end, it’s not that frothy, but there’s a lot of exuberance in the early-stage stuff…A lot of the valuations there don’t make a lot of sense.”
- Roger Ehrenberg: “Investing in technology has become fashionable…It used to be that angel investing was the province of wealthy men. Now its become the province of everyone.” (Really? We think it’s still for the wealthy, not a lot of blue collar angel investors out there.)
- Jeff Clavier: “There may not be a big implosion, but …The music is going to stop and people will realise there aren’t enough chairs for companies to get the next round of financing.”
- Dave McClure: “I’m not saying Quora, Foursquare, Square aren’t eventually worth a lot of money, but the price to pay to get into those games is kind of amazing — $50 to $80 million? … These companies are in big markets with proven founders, so maybe not absolutely crazy but certainly eyebrow-raising.”
- Ron Conway: “All the start-ups today have business models and business cases that make them viable…In 1999 when the bubble happened many companies did not have business models and advertising on the Web was very immature.” (This seems like the most reasonable quote of the bunch, and it comes from the most prolific angel investor of them all.)
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