Ultimately, it’s about following the rules of the investing ecosystem: Angels get things started, venture capitalists create mature, sustainable businesses, and investment bankers sell them. And if we all play by our roles, we’re all going to win.
Barz weighed in on Color’s $41M funding. I haven’t done so because I feel it has been a big distraction and much of the coverage has been by those that clearly have no insight into this industry (I consider myself someone who has very little valuable insight into such things). Barz has that insight. And his take is both sobering and balanced. He mainly comments on Henry Blodget’s take in Business Insider.
“It leads me to believe that Mr. Blodget’s piece might be satirical.”
“Mr. Blodget points out all the reasons why investing $41 million at this stage is a good idea. For instance, he points out that with that investment, Color is worth at LEAST $41 million to any buyer! Even if they spend half of it, Blodget assumes that the company would then have $20 million in cash and $20 million in a good idea developed! I mean, LOL. The investors can’t lose, he points out, because they have preferred stock. “
If you knew Wayne you’d be LOLing right along with him. I love the ending…
“Funds with a lot of money get to start the bubbles. Like a big ponzi scheme, the first ones in reap the most benefit. Because in a bubble, there’s always someone next in line ready to add more air. Until there isn’t.”