Silicon Valley Firms Having Cash Showers

Carl Bialik from WSJ writes "'The market for high-technology start-up businesses is so intense in Silicon Valley that some companies are being showered with millions of dollars from investors -- without even asking for it,' the Wall Street Journal reports. The home-improvement website Done Right received an email from a well-known investment firm inquiring about putting cash into the company. 'Paul Ryan, Done Right's chief executive officer, says the missive wasn't sent to him or to his executives -- it landed in a general corporate email inbox,' the WSJ reports. 'Mr. Ryan wasn't put off by the impersonal plea: "We're having very good discussions with [the firm] right now," he says, declining to name the potential investor.' The Journal notes that 'pre-emptive' funding is, of course, risky, and harkens back to bubble-year investment trends."

Comments

Re:Changes color with age though

[Omaze]

> AT the end everyone got burnt

Not everyone. Many people knew the game ahead of time and had their exit strategy planned. The CxOs had their business insurance. The investment brokers knew how to sell the funds that would ultimately fail to the less priveleged brokers. In the end the money was raked in by the folks at the top while the losses were lumped onto the insurance companies--who then distributed the losses by raising rates on health, auto, and home insurance.