Online advertising, digital media, tech economics
I refuse to believe that not a single VC this guy met with told him that ad tech is out of fashion amongst the venture crowd.
He’s had plenty of meetings, and people kept telling him to come back at the next stage: when you have a prototype, when you launch, when you’ve figured out a marketing strategy. Coop checked off all the boxes, became profitable, and still no investors wanted in.
via Nice startups finish last: what happens when VCs don’t want you | PandoDaily.
Yesterday’s acquisition of mobile ad network Jumptap by rival Millennial Media can be seen in that light. The “predominantly” stock transaction is worth $202 million based on Millennial’s closing price, a result that’s sure to disappoint Jumptap’s investors that poured $122 million in funding into the company over the past eight years. The company’s 2012 revenue was $63.6 million. This is a classic capitulation deal, where investors wash their hands of an investment that didn’t pan out how they’d like.
Aggregate Media Funds, a Swedish firm started in 2002, pools excess advertising space provided by 15 Swedish media companies that are shareholders in the fund, and gives it to start-ups in return for an equity stake (it also plans their marketing for them).
Digital advertising company CPX Interactive has developed an incubator initiative to support the advertising technology space. CPX will review start-ups in the sector that are in need of early funding and overhead support and infuse the selected companies with capital and resources to help clear typical early stage hurdles, including: core employee salaries, sales and marketing efforts, ad serving execution, creative development, technology needs and more..
via CPX Incubator.
I can’t believe investors fall for this stuff:
ZestCash takes an entirely different approach to underwriting by combining Google-style machine learning techniques and data analysis, combined with traditional credit scoring. As a result, the company can offer credit to many people who historically would have been turned away.
For entrepreneurs, the key message is to be really careful about doing a social networking startup in 2012. The social networking wave is about to crest. There are very few ideas and opportunities in this space that aren’t crowded. There will be many opportunities for “quick flips” based on momentum, but the oversupply of startups makes it a very risky time to start a company in this area.
By November, Mr. Andreessen and his team were on the hunt for less well-known names and called up Actifio Inc
via After Airbnb, Marc Andreessen Is Looking For Cheaper Deals.
Read another way, this means at the margins, Andreessen has no edge over other VC firms because this strategy is exactly what every other firm is using
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That’s my exact line that I start off with when I’m asked for advice by guys/gals looking to get into venture capital. It’s a very common to see junior VCs start off with this sort of warning.
Rob writes an overall good article but I would’ve been more blunt and said flat out that there is no career path here for junior guys. Sure, there are 1-2 guys that get through but let’s not call that a “path”.
If you’re extremely lucky or skilled, you’ll make it through to the other side but I would say that that’s extremely unlikely. Associate roles are really dead end paths so if you are really committed to taking on a junior role in venture, just make sure your expectations and plan a few years out. Of course, that is, unless you have a really strong answer for why a firm should give you a meaningful share of their pie.
I’m sure most of you have read this already– an intriguing story by Rand Fishkin of SEOmoz on his ordeal raising VC:
I’ve been released from terms of confidentiality and I can share the long, strange story of how I first rejected, was eventually persuaded, but ultimately failed to raise a second round of investment capital.
via Misadventures in VC Funding: The $24 Million Moz Almost Raised « Rand’s Blog.
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