I know I followed Rev3 closely because I enjoyed old-school TechTV. I also know I'm not an Instagram user. Am I the minority, here? Just trying to understand what's at play here, and what it means for the future.
The way a company like Revision3 gets a big valuation is by having massive distribution AND a big hit that goes mainstream, much like what Draw with Me did for OMGPOP. Revision3 never had a crossover hit that the average Joe watched. They stayed niche, and $30m is maybe as much as they could get for that audience and distribution footprint.
Meanwhile Instagram had MASSIVE distribution, in the millions, AND was generating content at an epic clip. No one piece of Instagram content might be as "sticky" or engaging as a single piece of Revision3 content, but wouldn't you want to have all those photos instead of a bunch of shows watched by a small but fervent audience?
Yeah, only one was perceived as a threat to Facebook.
$10m raised over 3 rounds, $30m exit... probably not a great outcome for any of the investors.