Valleywag
I hate you, Paul Kedrosky. Why? Because you've said, more perfectly than I ever could, why venture capitalists love profitless companies like Twitter, which has just raised a financing round from Union Square Ventures, the New York-based venture capital firm run by Fred Wilson and Brad Burnham. Companies with real business plans, making real money? It's cheap enough to start a company these days that savvy entrepreneurs don't need venture capital, funding themselves from a few angel investors and reinvested profits. It's only the clueless, the hapless, and the willfully profligate types like Evan Williams of Twitter, who want to fumble around with a fun toy for as long as they can get away with it, on whom VCs can make the tall dollars.
Why venture capitalists hate profits
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10:11 AM on Fri Jul 27 2007
By Owen Thomas
1,192 views
4 comments
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While they have been slack at figuring out how to efficiently and unobtrusively generate revenue, it is a platform with viability. Evan is an "idea guy" and an engineer. Credit is due for innovation, even if he may give away the show.
Shows a bit of a catastrophic misunderstanding of what VC money means to a company, but hey. I would guess Twitter has to take VC as their competitors are. Who wants to be outgunned and watch someone else take the prize?
Say, say,
Two thousand zero, zero, party over,
Oops, out of time!
So tonight we're gonna party like it's 1999!
What's funny is that my company got a pass from Union Square and we're a profitable company, and we have a business plan, and said business plan consists of a little more than "build something cool and hope that someone else can figure out how to monetize it after they buy us". That worked really well for broadcast.com.
It would be nice if VC's would take an interest in funding the future acquirers instead of the future acquirees.
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