What is a StartUp?
In few words, a startup is new company founded by people who, more likely, had key positions in well known and already big companies and who, most often, have an idea which – they hope – can become a powerful money magnet.
The vast majority of startups are based on the Internet technology. In other words, they create a website, mostly based on an poor / less original idea and much less attractive. After that the founders gather the investors and wait in a cozy corner counting the endless millions of dollars so easily given.
How much is invested in a startup?
You heard it folks. We’re talking about millions of dollars. In many cases we’re talking about tens of millions of dollars. Gathered as if they’re made of thin air, receiving in exchange a fair share of the newly founded company.
One of the biggest startups & investments database is CrunchBase. There, you can find out, on a daily basis, Who starts What and Who invests Where. Lets take a random example, shall we?
And I quote from TechCrunch’s article:
Quora, a new startup founded by ex-Facebook employees, has closed a first round of funding, and it’s a big one. Benchmark Capital has led the round and general partner Matt Cohler has taken a board seat at the company (Cohler is a former Facebook exec).
Both Quora and Benchmark have confirmed the funding, but they won’t comment on the size of the round or the valuation. Our source for the story says it was an $11 million round that valued the company at $86 million. Additional investors may join the round as well.
Elevation Partners was also rumored to have bid aggressively on the deal.
Quora first launched in private beta on January 4, 2010, just a few months ago. To get in you have to convince a current user to use one of their ten invitations on you. It’s one of the hottest private beta tickets in town. And for a question and answer site that’s saying something.
But there’s a magic to Quora that has captured Silicon Valley’s imagination. Something about the quality of the people and the content. Real discussions break out on Quora all the time. The signal to noise ratio is extremely high.
I really don’t want to diminish the importance of the Quora’s founders work nor their idea. But is it so revolutionary that it deserves $86 millions???
$86 millions?? Really?
It became more and more a reality the situations in which a well founded startup (which raised up to $50 millions) went bankrupt after a year or so …
My question is: what were they thinking? Do you have an answer?