The Venture Intelligence Blog

Silicon Valley VC and Benchmark Capital partner Bill Gurley has been calling a bubble for a couple of years now. Gurley explains why he is so concerned with bubbles in his latest interview to Technology Review magazine: Great entrepreneurs are relatively disadvantaged in these markets where so much capital is available. In a market where capital is hard to come by, they can still raise money. In this market, they can raise a ton of money, but so can a lot of [less capable] competitors that wouldn’t be in business otherwise.  ...Imagine two companies. One is told, “I want you to get to $100 million in revenue and you have to be profitable when you get there.” The other is told, “I want you to get to $100 million in revenue and I don’t care if you lose $40 million getting there.” Which of those two exercises is harder, and by how much? I would argue it’s at least 10 times harder to do the first. Until you can prove that you can generate cash flow, you don’t have a sustainable b...

A lot of pontification is flying around for TinyOwl, the food ordering startup that's landed in big trouble - much like the other young IIT Bombay alumni founded startup Housing.com. (Prior to the latest " layoffs triggered hostage crisis " at the company, one had noticed TinyOwl - apart from its remarkable back-to-back funding announcements - mainly for  a tweet on how, between cash backs from it and Paytm, one could get paid to eat!) Arvind K. Singhal, Chairman and MD of retail consulting firm Technopak, has used the goings on at TinyOwl, to ring the death-knell for startups across categories. "These incidents highlight some bitter realities about the Indian startup ecosystem, which have so far been overshadowed by the multi-billion dollar valuations of a handful of companies, and the multi-million dollar funding rounds they have done. I believe that such ugly incidents are in store for several other companies in India’s fledgling startup ecosystem. In fact, t...

Extracts from the interview appearing in the latest issue of the Indian Angel Network's newsletter: As far as E-Commerce is concerned, it is becoming a big money game and you will see companies either succeed massively or blow up in style. What is somewhat worrisome is the tendency of some E-Commerce companies to scale up sales even if they are negative margin, the more you sell the more you lose. Investors also need to ask probing questions about revenue recognition practices. There are some smoke and mirrors out there. I expect sanity to return to this space sometime in the next two years. Excessive valuations will be corrected. The smoke will clear and dodgy accounting practices will be recognised for what they are. People will not be selling below variable cost anymore. ...For the most part people are starting off aping successful businesses in the West. You can’t blame the entrepreneurs alone for this, since these are also the models for which funding comes easier because the...