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At Least $1.48 Billion in VC Funding Has Gone Up in Smoke This Year as the List of Dead Startups Grows (businessinsider.com)
An anonymous reader shares a report: We're halfway through 2017 and already a group of startups that together raised $1.48 billion have shut down. Some of these startups are: Beepi, the website that brought together car buyers and used-car sellers, shuttered in February. Quixey, a mobile search engine that was able to crawl apps, laid off most of its staff at the end of February. Yik Yak -- the anonymous social media app that was at the center of several college harassment scandals -- announced its closure on April 28, after struggling to keep users on its platform. Maple, a New York City-based food delivery service, closed down on May 8. Sprig, a San Francisco-centric service that delivered high-quality meals on demand, made its last delivery on May 26. Hello was the company behind the Sense sleep tracking sensor, which was designed to sit in users' rooms, rather than on their wrists. It closed in June after failing to find a buyer. Jawbone was a pioneer in wearable devices, with a focus on fitness trackers and portable speakers, but it struggled to pay its vendors.
1.5 billion is a drop in the bucket in America's economy much less the global one. This is /., I'd like to think we understand numbers well enough to know that.
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In order to have a business which ONE item of the following do you need?
I learned the correct answer over 30 years ago and to this day I see endless startups and investors still get it wrong. People who should know better. So it doesn't surprise me much that $1.5B goes up in smoke.
Obviously they didn't provide enough ways to ignore preexisting laws and regulations as required by a startup to be successful these days. It's the economy of cost savings through flouting the rules.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
But with much better odds of winning.
The stock market is just a casino for the rich.
Normal gambling is a zero-sum game.
There is a set pool of money between the players and the house, and that money is redistributed within that group---generally in the house's favor.
Investment is a non-zero sum game, but it is very risky. Between this and the real-world consequences, it is quite different in spite of a superficial similarity.
That said, only risk-takers would find either gambling or VC investment appealing.
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According to the latest ruleset, this post should be modded as Vorpal Flamebait +5.
Money is like energy. Unless there is some huge devaluation event or you actually burn physical notes this money has not gone up in smoke.
What has really happened is that this $1.48 billion has instead ended up in the hands of people other than the VCs or the companies they were funding.
In the words some other group of people is now collectively $1.48 billion richer.
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I don't know how they define a startup, but it's apparently very broadly interpreted if the 20 year old Jawbone is included.
Having lived through the last Dotcom Bubble, I'm very surprised it's taking this long for the current one to pop. This time, it's mainly situated in Silicon Valley, but last time there was an East Coast bubble outpost in NYC. This was because traditional media publishers and TV networks were desperate to buy into the bubble as well. I saw lots of huge 3-story Times Square billboard ads for companies like Beenz and Webvan as I walked to my "boring, old school" sysadmin job. I always wondered where these companies got their money from...I mean obviously from VCs, but do they just dump $40 million in the company's bank account and say "go buy Nerf toys, Aeron chairs and all the advertising you can book!"?
I'm sure the pop for this current bubble will be coming pretty soon. There are just too many copycat companies out there trying to squeeze the last few drops of blood out of the bubble. I've seen no fewer than 6 meal kit delivery services (like Blue Apron,) at least 4 clothing delivery subscriptions (like Stitch Fix,) and 10,000,000,000,000 magic DevOps tool vendors. (Guess what line of work I'm in these days...I can't tell you how many 5-person startups have offered to solve 100% of my application problems using their One Cool Trick.)
A favorite phrase back then was "this time it's different!" Indeed it is -- this time we have The Cloud. A startup doesn't have to spend millions to buy or rent a data center, and they can coast on VC fumes for much longer than Bubble 1.0 startups. They can also advertise on Facebook and Google instead of those Times Square billboards. So I imagine this will continue for a while, but just like the last bubble, this one isn't sustainable either.
It is Trickle Down.
VC is the ONLY way to get the rich to part with money, by appealing to their greed. Without VC there would be no trickle down at all.
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