Last year, more than 1,500 Web 2.0 companies were started in Silicon Valley, according to the January 22 edition of The Guidewire Report.
We believe the number: We see a lot of Web 2.0 pitches from young entrepreneurs. The basic pitch: for an investment of $2 to $5 million, they can build a company that Google, Yahoo or Microsoft will buy. And, in under two years, we can get 5-10 times our money back. How could you not like that?!
We dont. We always decline to participate in deals like that. We think this is a kind of disease, often caught by these youngsters in business school. They are looking to cash in on Web 2.0 fever and flip their companies quickly for a nice tidy sum.
These entrepreneurs confuse a feature for a company.