New Data Shows Why the WSJ is Wrong About the Startup Cash Crunch | Hacker News Reader

New Data Shows Why the WSJ is Wrong About the Startup Cash Crunch

betabeat.com

27 pointsshakes7 comments

The story conflates the problems with walking dead VCs, many of which were formed during the dot-com bubble, with what is going on in the early stage startup world.

There are more deals and more cash going to Internet startups than ever before. The lower valuations and struggling companies are a natural and healthy end result of the boom in early stage funding for social/local/mobile companies that took place during 2009-2010.

Spot on. It's different this time.

Sure, it surprised us all when revenues and earnings turned out to actually matter in 2000, but it's 2011 now, man, and the future's so bright I've got to wear shades! The fact that I can download 14,511 apps that allow you to share photos of your cats is the only indication you need that we're living in the post-earnings era.

Making money is for squares. As long as you can line up that Series P round, the party's still on, man. Rock it, don't block it.

"Making money is for squares. As long as you can line up that Series P round, the party's still on, man."

What's sad is I think many entrepreneurs are taking this seriously. They think "starting a company" means raising a ton of money, working on cool projects, and never once thinking about making real money.

It's getting harder and harder to call these projects companies or businesses.

What's also sad is that those very entrepreneurs are sometimes right (youtube, skype). It makes it harder to be critical of that strategy.

The most important thing to do with any article is to Google the name of the reporter.

Pui Wing Tam's only MO is writing poorly conceived hit pieces on Valley companies and personalities.

Here she is literally going through Salesforce CEO Marc Benioff's garbage: http://blog.sfgate.com/techchron/2006/11/17/valleywag-takes-...

Here she is beating up on every CEO who's not Zuckerberg or Chad Hurley (title tag: "Struggling CEOs"): http://online.wsj.com/article/SB119741476977621971.html

And here she is saying "Venture Capitalists head for the door" -- in 2009, no less!: http://online.wsj.com/article/SB124416376153487535.html

The woman is just a hack who writes the same article over and over again.

Another tactic is to look at the sources quoted in the article. In the WSJ article yesterday, the primary source was Naval from AngelList -- who has a better view of early stage financing than anyone I can think of.

Unless she distorted or fabricated his quotes, I think there may be something to the story.

Naval sees one small slice of a very large market.

Given the bleak macro economic picture, funding has probably fallen on Angel List, where a lot of doctors, lawyers, and non techie investors look for deals.

But the overall picture for early stage funding, as concrete data shows, did not get any grimmer over the last two quarters.

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