Steady as She Goes...

by Jim Armstrong

The business of venture backed internet companies is pretty hot these days with sky rocketing IPOs and a flurry of fundings. But finding the signal amidst the noise has never been harder. 60 days ago, a certain company was all the rage. At least half a dozen of the new pitches I took referenced the company’s assumed success as a comp for their own glorious future. I remember thinking how fast that happened and how people were providing so much assumed intelligence towards investors, who MUST know what they are doing. Here we are a mere 60 days later and the company (which shall remain anonymous, but there are plenty of examples) is getting pummeled in the press. The founder left. While the piling on is now most likely overly negative, an analysis finally focused on the data that mattered — mainly that nobody is using the product.

Venture is rife with gossip and suspicion and shadenfreund because we all don’t know how the future will unfold and we all take risk. Gossip and information is unavoidable and fine and well, but in venture capital all the information MUST culminate in an independent mind, taking an intelligent and supported point of view. This point of view is open to critique and attack and risk, but taking a stand among all the unknowns of our business is the only hardscape that decision makers in the highly ambiguous world of startups and venture capital can use to move forward.