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Eric Olson

Just writing to let everyone know that I am in the process of editing the VentureWeek podcast as I write this and should have it up on for download before 5pm EST today (Saturday). You can also subscribe to my feed so you won't have to keep checking back to see if I have posted. Looking forward to getting some feedback from everyone on the first show!


i think i get the original point you were making.

certainly true that building a business as an acquisition target but no foreseeable standalone cashflow is a dangerous proposition.

probably better to be aiming for a future business model that's sustainable, and if an M&A comes along that's a good fit before you get to maturity then that's a great alternative to evaluate along the way.

and i would agree that the debate & fuzziness is probably most around businesses that have no cashflow today, but that do (or do NOT) have monetization / standalone possibilities in the future.

then again, you probably see more of the dealflow than we entrepreneurs do, so perhaps your evaluation of Bubble 2.0 froth is a reasonable early warning sign.

in any case, i appreciate a VC who exercises some caution along with their web 2.0 enthusiasm :)

- dave mc


Dave, the podcast seemed a little defensive but I don't think you should be. I wonder if it's a natural extension of bubbles that as they grow, they attract a population of entrepreneurs that are not familiar with the "rules of the VC road". For instance, you spent a lot of time talking about what kinds of businesses are and are not appropriate for venture capital, which, frankly, you'd think any well-prepared entrepreneur would understand.
Also, I wouldn't apologize for waiving a cautionary flag in an environment that appears to be overheating to your experienced eyes. Clearly, there are bubble hallmarks: young "CEOs", new browsers, etc... To ignore that in the hopes of not offending anyone would be to unlearn what we learned in 2001-02: namely, that new paradigms are nice, but profitable business models are nicer.
Maybe a better way to highlight this risk would be to have a couple of entrepreneurs who got burned by 1.0 comment on what they went through. Instead of being the VC who threw water on the party, you could be the guy who made sure the bus brakes were working before the big downhill.
I guess the bigger question for me is why you felt the need to raise the flag -- are you protecting entrepreneurs or fellow VCs? Do you really think there are companies that are getting undue funding to the level seen in the last bubble? Or was it a result of too many conference conversations with attendees pitching half-baked concepts?

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