Overpopulation
By Rafe Neddleman, Editor, Redherring.com
[email protected]
Copyright =C2=A9 1998 Red Herring Communications. All rights reserved.
There is so much venture money in technology now that almost any business
can get funded. But the conversion of the entrepreneurial market from
money-driven (VCs in control) to talent-driven (entrepreneurs in control)
doesn't mean that startups have it easy, even if they think they do. When
entrepreneurs have the upper hand, as they do now, venture capitalists en=
d
up competing with each other and over-funding startups. This can make for
lax business practices (it's easy to hide problems when you have a $100
million war chest) and can encourage the growth of businesses that are
simply not equipped to weather any kind of storm. There are plenty of
brilliant, driven entrepreneurs in the business today. Unfortunately, sin=
ce
you don't have to be either to get funding, it's harder than ever to tell
the eagles from the turkeys. Come a market correction, we'll likely see a
mass extinction of the dumb birds, as they get gobbled up for cheap by th=
e
enterprises that use brilliance, not easy money, to compete.
Tushar J. Mehta
email: [email protected]