Tuesday, January 22, 2013

Investors contribute to an unhealthy feedback loop for unsustainable startup valuations

This post was originally created as a comment on the Glen Hellman blog, Driven Forward.

I think there are (at least) two different parts to the problem of investors contributing to "bad startups".

First, as the industry cycle starts heating up and a bubble is close to forming, we have the issue of a lot of existing startups (as well as the launch of new ones) becoming "valuation driven" instead of "business/revenue/profit driven".