It’s relatively easy to get money right now. Clearly, this is great for entrepreneurs and bad for investors. However, many seed investors are saying they are being as selective as ever. Perhaps this means there are simply more entrepreneurs and startups than we’ve ever seen. Many of these startups can’t get a top engineer for .25% of the company in a series A anymore, but they are more able to set pricing with new price-insensitive angels. Here are the takes from some of the industry’s thought leaders:
- Chris Sacca: “I think at the high end, it’s not that frothy, but there’s a lot of exuberance in the early-stage stuff…A lot of the valuations there don’t make a lot of sense.”
- Roger Ehrenberg: ”Investing in technology has become fashionable…It used to be that angel investing was the province of wealthy men. Now its become the province of everyone.” (Really? We think it’s still for the wealthy, not a lot of blue collar angel investors out there.)
- Jeff Clavier: ”There may not be a big implosion, but down the road there will be a bunch of blood and tears….The music is going to stop and people will realize there aren’t enough chairs for companies to get the next round of financing.”
- Dave McClure: “I’m not saying Quora, Foursquare, Square aren’t eventually worth a lot of money, but the price to pay to get into those games is kind of amazing — $50 to $80 million? … These companies are in big markets with proven founders, so maybe not absolutely crazy but certainly eyebrow-raising.”
- Ron Conway: “All the start-ups today have business models and business cases that make them viable…In 1999 when the bubble happened many companies did not have business models and advertising on the Web was very immature.” (This seems like the most reasonable quote of the bunch, and it comes from the most prolific angel investor of them all.)
Thanks to Jay Yarrow from Business Insider and Naval from Venture Hacks!