Too Much Funding, Too Few Good Ideas
Anyone else think that there are a lot of ridiculous companies getting funding now? If you have anything to contribute contact me at [email protected].
3 comments
This is because investors invest in people rather than ideas. This means if an entrepreneur has been funded before or is associated with a past funding they will get funding regardless of the idea. This is why you are seeing "ridiculous companies" getting funding. An amazing idea by an unknown entrepreneur is worth less than a crappy idea from an entrepreneur who has social proof (ie. is connected). To answer your question, yes, lots of ridiculous companies are getting funded for the wrong reasons.
This is an illusion that appears real to you. If you look at the biggest 5 web companies during the first 6 months of their inception you would have said the same thing. If you think you can judge success by hearing the idea then what would you have said about farmville? Angry birds? Twitter (when we already had Facebook status)? My point, in the beginning all companies seem like a feature, and ideas are nothing and execution is everything.
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