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(j/k crowdfunded equity is going to be a shitshow)

hehe..

I just sunk my last $20,000 in your app, man. Now you are shutting down and getting cushy jobs at Google? Fuck that, where's my money? I will stalk you and your new boss on LinkedIn until you explain WHERE THE FUCK my money is. My wife is leaving me and the kids want to go to Disney World.

I agree that venture capitalists passing on great businesses because they're "lifestyle ventures" or whatever the politically correct phrasing is is an issue, but that doesn't seem to be the case here? EverPix wasn't trying to become a $B business, yeah, but they were still rapidly outspending their income streams, which is only sustainable if you're an extreme edge case (or receiving the massive, massive influx of buzz and users like, say, SnapChat.)

Everpix's raw product seems to be great in the same way "free puppies for everyone" is great. Their monthly variable costs outpaced their revenues, and their market positioning left them amidst a sea of giants who offered similar services for free.

I think neither venture capital nor crowdfunding should (or can) be a panacea for a bad business model.

Right, I agree that it looks like their business model was flawed. That said, that should've been the rejection status code instead of the billion-dollar opportunity remark.

Wait, explain? Why should VC's fund something they don't think will make enough money? That seems to be a sense of entitlement - clearly, paid users were not enough to support this product on its own (which by all accounts, is a shame).

I think his implication was that paid users would have been enough to support it in the long run if the goal of investment were a stable business with some amount of yearly profits rather than a VC jackpot valuation exit.

But why on earth should VC's fund it in that case? Isn't that an entrepreneur's decision, not the VC's? Blaming the VC's for not funding this seems ridiculous to me.

But isn't that more the role of traditional sources of capital (banks, &c.) than a SV VC?

To be honest, I've never heard of traditional sources of capital funding websites but I suppose that doesn't mean it doesn't happen.

In any case, I agree that it doesn't match the VC models, but I'm not sure there is another model available to a web business that can probably get enough traction to survive, but not enough to offer massive returns.

In fact, I'd go so far as to say there are probably significant market segments not being served because they offer a modicum of stable profit but have large up front costs without a lot of growth opportunity.

I wonder if this is an opportunity -- the world is not solely composed of moon-shot local social enterprise websites, and worthy businesses are being shut out of the world of cheap money by the prevailing culture. Hmm.

Individually, sure, it makes sense, but the fact remains that the emergent behavior of the system seems to be the ossification of capital.

"A glorified photobucket doesn't need to be a gigantic billion-dollar business."

No... it absolutely doesn't. But this particular photobucket wasn't even a $1 business. It was a NEGATIVE business.

> Had the investor said, "Yeah, we don't see this becoming a $100M any time soon", maybe that'd make sense. But the additional order of magnitude (one billllllllllion dollars) strikes me as unreasonable.

Startups forget they are one company in a portfolio of companies that comprise a fund.

Venture capital expects a fraction of its portfolio investments to succeed. So it must invest in companies with very large target markets so the handful that succeed can offset the losses of those that fail.

"fuck these guys" is way over the top. there's nothing wrong with deciding you only want to invest in businesses you think have a shot at being worth 1 billion dollars some day.