Startup Chatter by Donna Bogatin

You Go Marc! Canter is an in the trenches owner/operator practitioner, and so am I.

Marc Canter sheds sunlight on the unwholesome underbelly of an entrenched venture capital industry and an increasingly institutionalized angel financing syndicate, and so do I.

Marc Canter also points out the unseemly hypocrisy of a purported open blogosphere, one that gleefully lobs the dreaded “negativity” label on any independent thinker that has the audacity and courage to intelligently refute the self-interested pronouncements of crowd-pleasing, link-baiting, traffic-chasing, non-transparent, blogging VCs and so-called “A-Listers,” and so do I.

The old boys, by-invitation-only, club that is the venture capital and angel world is a rich and exclusive one, but not one spurred by any clubby notions of “making our world a better place, as Canter points out, and so do I.

Marc Andreessen obviously “is able to raise as much money as he wants,“ as Canter says today and I underscored yesterday, in “Ning: $60M VC for Facebook Fight, AdSense Optional“: I critique Ning’’s classic Web 2.0 “cool app,” free to the user power play, no serious revenue model necessary, non-business model way of doing VC business.

Why is Marc Canter so riled up about an incestuous, fueled by hidden-agendas, media which glorifies the obscene amounts of money Fast Company assures venture capitalists would “kill” to drown Andreessen in? Because with every rich penny doled out to the vaunted “connected” crowd for propping up non-sustainable, designed for quick exit flips, non-businesses, the real world of day-in, day-out, real entrepreneurism takes another shot on the bootstrapping chin.

Marc Canter: 

Sure - the Diabetes folks and hookers and others who could never have their own social network, now do with Ning, but there’s a reason why they never say how many of their nets have more than 2 or 5 people in them. There’s a reason why they don’t disclose details on how much money they’re making or how much money they’re losing - cause Ning is about selling out. That’s why it was created. That’s what they live for. Its all about the exit strategy and here’s a company that appears to have no intention of ever making money (Andreessen refers to it as ‘cash flow positive‘) - just staying alive.

This is so diametrically opposed to who I am and what I do - that I’m sorry - I get to complain about it. That’s why God invented the blogosphere - so folks like me can point out what’s horrible and evil about this strategy.

Andreessen had to stake millions of his own fortune on Ning to help prime the clubby insider spigot of purportedly smart money. Union Square Ventures can’t afford Andreessen’s big budget 2010 New Year’‘s Ning bash already scheduled in the calendar, but Ning is right up Fred Wilson’s cherished non-proprietary, free consumer apps, build up non-sustainable traction fast, give Union Square Ventures the exit it deserves, investment alley.

Marc Canter:

For the rest of us folks - we have to maintain cash flow positive - in other words - we don’t see what’s so bad about making money. If Ning was using their money to build great products, reach out and help others, participate in changing things - then we could look upon their money raised as a good thing. But this current round just discloses the pure greed and gluttony of Ning. The Ning platform seems to be the LEAST amount of social network that they could come up with - and still offer something to end-users. But that makes sense - right? Why do TOO much when you can save the money for yourself?

Fred Wilson bragged that he had made his investment in del.icio.us without knowing how it was going to make money. Clearly Twitter doesn’t either. But why is that a good thing? Should we be starting companies that are designed to NOT make money?

Wilson also just bragged, however, that he could “honestly” care less any more about Yahoo’s or Google’s or Microsoft’s or AOL’s or News Corp.’s deep pockets: SEE NO Deals: Etsy, Twitter, Disqus Lose Google, Yahoo, Microsoft Sales

So maybe it is a good Ning thing Union Square Ventures doesn’t have their own deep pockets! After all, Wilson’s dissing of the small pool of prospective buyers that VC backed Web 2.0 ventures stake their very existence on, is not a very “clubby” thing to do.

The bootstrap startup club is nevertheless alive and well, and supported here at StartupAlpha.com:

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