But, I do have a problem with how it seems that these businesses are being selected. It seems that the level of funding that these people raised is used as a hallmark of how good the entrepreneur is. Isn't the mark of a good entrepreneur how much they can do with how little?
I can understand why a video company like Video Egg might need a high capitalization. Bandwidth charges for video streaming are high. But, I'd still balk at taking $27 million in funding.
Etsy--31 million in funding. Granted, the company has 1 million users and 75,000 sellers. But really, 31 million dollars! What does an e-commerce site need 31 million for?
I've actually begun to see taking large sums of VC money as a competitive disadvantage. If these companies take $20-30 million in funding, the VC's are going to push for a 10x return. That means that their investors are wanting a $200-300 million exit. And, even at those rates, I'd imagine that the founders shares are quite diluted by that point.
And, I'd guess that the chances of getting a $200-300 exit are a lot slimmer than getting a $5-6 million exit. For details Google "Digg acquisition": http://www.google.com/search?hl=en&safe=active&clien...