Below is a response I had to an article on the Upstart section of the Business Journal that discussed what the “Series A Crunch” means for entrepreneurs, VCs and even young technology journalists. It was in agreement with a blog post by ReadWrite editor Dan Lyons, which highlighted the same sentiments but with less tact.
“The Series A Crunch is definitely something to look into, but what about Sarah Lacy’s other article which came out the day after which explained Series C investment jumped from $55 million to $70 million and Series D stayed at $100 million? It seems investors are already compensating for the flood of startups given that information. Sure early stage investment is declining, but if you can hold onto customers and show a credible plan for growth, the investment dollars are still there.
Also, you mention Facebok’s IPO which was, indeed, a horrible stint in public offerings. However, they have recently been applauded with the introduction of Facebook Exchange (FBX). Some publications have even hinted at it being more efficient than Google’s Ad Exchange. So while the initial public offering was bad, it seems that FB could potentially recover.
Now this is all from a recent journalism graduate, most likely inexperienced and optimistic, but without optimism, is there even entrepreneurship?”
This is the natural ebb and flow of startups and markets in general. Something gets hot, and people respond. However, this doesn’t mean investment is done and a new dotcom bubble is resurfacing. It means investors are getting smarter in the later rounds where it counts.