Hat tip to Jason Lemkin for sharing an article with a similar sub-title with me this morning.
This has been going on a long time. I wrote about it 2 years ago and it wasn’t a new development back then:
VC’s are addicted to finding more Googles and Facebooks. They’re addicted to placing their bets at the last possible minute, after a product was built, after happy customers were had, and after as much momentum has been built as they can possibly get to without a big capital infusion. Ten million users is the new one million users. If VC’s have to bribe their way in at an incredibly late stage (can you say, “Github”), they don’t care. It’s better than actually having to do what the original VC’s did which was to try to understand the markets, technologies, and teams.
I don’t think it’s at all healthy for Silicon Valley that we’ve gone down this path. Apparently the VC’s don’t either, or they wouldn’t be grumbling constantly. Investors can’t be happy given VC returns. Some entrepreneurs may be happy, but I have always hated the idea of technology companies that have to stand on the merits of whether they’re fashionable rather than on whether they’ve built something useful.
This won’t change
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