Economically unsound

by Santosh

The latest concern in all avenues is that we are in the midst of another Internet Bubble.

Online Ad Revenue remains concentrated in only a few hands, frustration builds – PaidContent.org

I am a big believer in proving revenues for any business.

If you can’t monetize – don’t do business.

The high value placed on many start-ups and minimal requirements for financial performance are raising expectations of other entrepreneurs. Sharon Wienbar, managing director of Scale Ventures Partners, an investment firm, cited the $100 million valuation that investors gave to the Internet genealogy site Geni.com, founded last year in Los Angeles by a veteran of PayPal.

“Now every entrepreneur thinks he should get that,” Ms. Wienbar said. “I have a feeling a lot of entrepreneurs are secretly meeting for beers on the Peninsula, saying, ‘Hey, look what I got.’”

Mr. O’Kelley, formerly of Right Media, said other entrepreneurs had begun to think that the financing game is best played by avoiding actual revenues — since that only limits the imagination of investors. “It’s a screwed-up incentive structure, just like you had in the first bubble,” he said.

~ Start-ups awash in Dollars, Again – New York Times.

~ Santosh