Twitter ‘Cash Flow’? When VCs Are BAD for Web 2.0 Startup Business
By DONNA BOGATIN • Jun 28th, 2008 • Category: DEAL TRACKER“Rock-star” venture capitalists may soon see their shiny stars fade fast.
Jim TheStreet.com Cramer shared with me his belief that “bootstrapping” is the key to successful lightweight Web 2.0 startup ventures, when we both marked Internet Week NY earlier this month.
Who needs VCs? Even as a former International investment banker, I now champion Silicon Alley bootstrap entrepreneurs, with my newly launched StartupAlpha.com online-offline support network for metro area technology ventures.
A bootstrapping Internet entrepreneur myself, I am proud to have conceived, launched and built out a pioneering multi-city online directional media platform with a solid business model that creates real economic value for real word owner/operated local businesses: UrbanSavings.com.
My StartupAlpha.com hosted pro-bono Bootstrap Workshop picnic in Bryant Park was the sole Interntet Week event that actually put in motion Mayor Michael Blloomberg’s declared commitment to foster the development of ALL technology entrepreneurs in New York City.
Since 1997, when I created the first Internet For Entrepreneurs Workshop in New York City on behalf of the Small Business Administration, I have been promoting best business practices for Silicon Alley as Associate Professor of Information Systems for the NYU Stern Graduate School of Business–my alma matter–among other Manhattan higher technology education institutions.
It is therefore particularly distressing when supposed “rock star” VCs deliberately foster economically unhealthy startup principles at their blogs with the end game of pumping up the perceived value of their own ill-conceived investment portfolios.
SEE: Disqus Revenues? NO COMMENT, Just Like Union Square Ventures
The New York Times may be writing today about a perilous lack of good ways for Venture capitalists to “cash out,” but on Wednesday, I asked Union Square Ventures managing partner Brad Burnham directly about how he aimed to “exit” his non-revenue generating social media properties going forward.
Not surprisingly, Burnham was as disingenuous publicly in-person about portolio “business models” as his partner Fred Wilson routinely is publicly at his blog: We can always count on “cash flow,” Burnham said with a straight face.
RIGHT! Both Twitter and Disqus proudly wear their our business model is satisfying non-paying users VC-fueled credo on their “viral loop Web 2.0 sleeves.
Twitter is down again, but this time may very well be out.
Portfoilo investment Disqus is now Wilson’s latest blog crusade: A big A VC “comments” campaign is underway, even while the VC is on a month-long summer Solomon-Wilson vacation, which he nevertheless pitched at his blog as Union Square Venture’s contribution to helping “solve the world’s problems.”
SEE FULL FIRST-HAND REPORT: Union Square Ventures to Startups: Shop Around for a Better VC Deal (STARTUPS BEWARE: Don’t be taken to the VC cleaners!)
ALSO: NYT’s Saul Hansell Calls Bloggers’ ‘Conversation’ Bluff, So Do I
HEY! DO YOU HAVE AN ONLINE STARTUP, OR AN IDEA FOR ONE? PITCH YOUR VENTURE FREE AT THE STARTUPAPLPHA.COM PITCH NETWORK
PLUS: GOT A STARTUP? MAKE YOUR SILICON ALLEY PITCH AUGUST 12, COURTSEY OF STARTUPALPHA.COM
DONNA BOGATIN is the Founder & CEO of STARTUP ALPHA
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I’m bootstrapping an online business of my own, a blogging network called PostRanger.com, which I hope will eventually also feature social media elements. The theory is to create a resource center and place to share both blogs and perhaps eventually other types of new media grouped by category reversing the trend of basing the social network on personal profiles like MyBlogLog or MySpace. I’ve avoided even thinking about seeking funding for two reasons:
1. I’ve no idea whether this will work and though I see a value in a network that allows me to search for blogs and other types of on line new media by topic others may not.
2. I also don’t know whether this site can be adequately monetized in any way that will generate revenue from the growing number of people who are viewing it and I certainly do not want to add to the break even point by tacking on outside investment at this point.