Posted under Venture Capital
from 1212 days ago

Entrepreneurs and investors have been enamored with consumer internet startups for the last few years. But there are signs this is ending.

Some observations:

- Thousands of early-stage consumer web/mobile companies were started and funded in last 24 months.

- There are only a few dozen VCs who actively write consumer Series A checks, and those VCs will only do a few deals a year.

- Facebook’s market cap is about half of what most tech investors expected before the IPO.

- A few breakout early-stage consumer hits (Instagram, Pinterest) have reached tens of millions of users in record time.

- Internet users have tens of thousands of services/apps to choose from but limited time and attention.

Some consequences:

- For consumer startups with non-transactional models (ad-based or unknown business models), you need something closer to 10 million users versus 1 million users to get Series A funded.

- For consumer startups with transactional ...


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