The Valley's build-a-product-not-a-company culture is swelling with every super angel who talks up why flipping companies is good for entrepreneurs and a better way for them to make returns in an insanely crowded field of funds and companies. The Valley's flip-mania is even getting a little too uncomfortable for some of those take-the-money-and-run proselytizing angels. Several investors have told me of recent pitches where a young entrepreneur said they were going to build a product, and if it didn't take off in twelve months, they'd scrap the company and start over with a new product. Um....Ok, maybe some entrepreneurs think that, but the fact that they're saying it when they're trying to raise money? What is an investor supposed to say to that? "Yes, Mr. Entrepreneur, please take my $100,000 I earned building my company, and if your half-baked idea that you're so clearly not committed to fails and you haven't spent it all, feel free to burn the rest. Why do I make the check out to?" So what's so wrong with the flip? In moderation, nothing. The low-cost of starting Web companies, means entrepreneurs can own huge chunks of something they can sell for several million dollars. In many respects, wealth generated by new ideas is spread more evenly than it has been in the history of Silicon Valley. Isn't that good? Short term, yes. Long term, we're killing the macroeconomic golden goose.
Source: http://feedproxy.google.com/~r/Techcrunch/~3/UJICCMXWqt8/
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