Are we facing the beginning of a new technology bubble that leads to a debacle like the one that caused the collapse of technology companies, in what was known as the dot-com crisis at the beginning of the decade? Every day analysts of all types, condition and location issue more accurate analyzes than others – on the bubble that will burst at any moment, alarms and alarmists that have been exacerbated since LinkedIn’s IPO and Facebook’s announcement of going public. the first quarter of 2012. On the other hand, the second half of last year was a great moment for investors, seed capitals and angels of all kinds with a strong increase in activity. Everything suggests that this year will be a great year for those who are strongly committed to new platforms and technologies, driven by the momentum of LinkedIn and Facebook, as I said before, which, rather than stopping the positive current, have triggered activity. We comment today on an infographic by Column Five Media for Udemy, in which analyzing hard data, it is concluded that although Venture Capital is less active globally than before the strong recession that began in 2008, in terms of Invested capital levels are already reaching those prior to the beginning of the crisis. Good news for Startups and entrepreneurs who dream of finding the investor willing to believe in their project and become the new Mark Zuckerberg; although the valuations of some of the great stars of the online sky, compared with their income level could indicate an overvaluation and the consequent inflation of the bubble at the moment. Thus, let us take as a point of analysis two concepts; The first is we are facing a new bubble and the second and not least: What to do to get investors for a Startup?
Investment in new projects
As we said, after a strong drop in activity in late 2008 and early 2009, investment in venture capital and financing of new online projects returned to pre-crisis figures; However, the number of projects financed was significantly lower, remaining on a plateau without great variations during the last 3 quarters, of course without the joy that was experienced at the beginning of 2008, nor with the collapse experienced when the crisis worsened, let’s not forget that we are talking about the United States.
Investment volumes in Startups
In terms of amounts allocated to financing new projects, the first quarter of 2011 has been the highest in absolute terms since the first quarter of 2008, we are talking about 7.5 billion dollars against 7.1 billion. In other words, the tendency is to invest more, but in fewer projects. Also, let’s not forget that LinkedIn’s IPO has influenced these figures and, as with the number of projects financed, the volume of investment dropped sharply, especially in the first quarter of 2009.
Valuation of a company versus revenue, indicator of a possible bubble
The issue of the stock market valuation or commercial value of a company, versus its income is what worries analysts and makes them herald a new bubble, since in some cases the imbalance is more than eloquent: Let’s start with LinkedIn, with a current valuation of $ 9 billion and 2010 reported revenue of just $ 243 million. Let’s continue with Skype, the voice and communication over IP platform, recently acquired by Microsoft for $ 8.5 billion, and reported revenue of $ 8.5 billion. 2010 of 840 million dollars. Nor is Groupon left out of this ranking, the new pretty girl on the Internet who had the pleasure of saying no to a purchase offer by Google and whose value in 2011 is 25,000 million dollars. and 2010 revenues of 760 million. There is also Pandora, the Internet radio company, which launched its IPO yesterday with its shares exceeding 60% of valuation and which today has collapsed, with a cad This recent information that begins to be published by the financial media undoubtedly suggests the existence of the much dreaded bubble, since it is not possible for a company whose income declared of 55.2 million dollars in 2010, has a value of 984 million dollars, according to experts. Thus, we end the ranking with the queen of queens, Facebook that although it has not yet begun to trade, has already been listed. assumes a valuation that exceeds $ 100 billion and had 2010 revenue of $ 2 billion.
Where are the investors
If you are an entrepreneur or you have a Startup and you are looking for investment, always speaking within the American market, California dominates by far, with an abysmal 52%, followed by Massachusetts and New York on the east coast that monopolize 10% and 6% respectively. , then continue with Texas and the state of Washington with 4% and 2%, while the rest of the United States complete the map with 26%.
In which sectors are investors betting in 2011?
Of the total investment destined in 2011 to finance new projects, social commerce, a new term that redefines e-commerce and Social Media, takes the cake with an abundant 22% of the pie, followed by advertising projects, sales and marketing with 14%. In third place we have the social environment with 7%, which shares with data storage. Following the ranking are games, tools for electronic commerce, online education and training, health, information management, accounting and finance, employment, security, video and photo; all of them with percentages between 5% and 2%, while other unlisted categories bring together a significant 22%.
By volume of capital attracted, the winning companies in the first quarter of 2011 are Groupon, with its discount coupon scheme and $ 1.14 billion raised. In second place is Angies list, a site dedicated to opinions and ratings of products by consumers with 147 million, followed by Box, the online content platform with 77.6 million, Weatherbill, a site specialized in weather insurance with 58.9 million and close the Color list, the mobile application that allows you to share images dynamically with 41 million dollars.
How to get investors for a project
We finally come to the question that all of us who are or are part of this online world ask ourselves, since it is the only possible way to turn that brilliant idea into reality and the answer comes from Udemy.com with the five steps to success. 1.- A good initial imposition or create a high-level human team 2.- Get meetings with angel investors or investment companies 3.- Have at least one investor who guides and directs the process 4.- Look for investors committed over time 5.- Sign While it seems easy, we all know that it is not, although not impossible, so we ended with a phrase from Dan Martell, co-founder of Flowtown to inspire and guide us If you do not have a passion for your customers, then you are not creating one. company, you’re just creating a job for yourself Good luck