johnny won

Hey there exit strategy

Foursquare is rumored to be worth $100M and Business Insider has a good look at why (it hardly has anything to do with usage):

1. That some company — Google? Yahoo? Facebook? — will believe that Foursquare can gain mass consumer adoption. 
2. That some company will buy or develop a Foursquare rival and that another company will come to believe it needs Foursquare to defend its market position.
3. That some company — we’re thinking of Yahoo here — will decide that buying Foursquare for $100 million is a cheap way to demonstrate to its employees and investors that it is interested in making bets on startups that could gain mass consumer adoption. 
4. That Foursquare will gain mass consumer adoption 
5. And, most importantly: That someone,someday will come in and bet on any of the above happening, but at a higher price.

The VC Effect

The next generation bends over - (37signals)

Jason Fried calls it a VC-induced cancer. The true price of startups is the price cashing out.

Thank you for your money. And now…

Digg has raised 40 million dollars to date.  With that kind of money, investors demand explosive growth.  Since the economy has gone to shit, there’s a very slim chance that Digg will see a sale before it needs to raise more money.  As a small company, Digg could have been a very profitable business, but instead they took too much money and made too many expectations for themselves.  I can guarantee you that Jay Adelson (CEO) and Kevin Rose have some demanding goals to meet, and lately, they haven’t been meeting them.

Ted Dziuba nails it.