Biggest Venture Hype of 2005

From Dan Primack’s daily note, the biggest unfulfilled “hype” (his word) of venture investing in 2005. The key sentence is, of course, the last one:

Biggest Unfulfilled Hype
Web 2.0. Sure there is tons of money being spent, but how much of it is being spent on gadgets with real revenue-generating potential? Not much. Never before has an entire VC-backed industry been so reliant on just a handful of potential acquirers (Google, Yahoo)


  1. “never before”? “handful?” come on. there are a number of acquirers out there, and unlike in the late 90’s all of them are profitable with cash hoards and a huge base of users that could benefit from additional products & services.
    on the contrary, while the size of recent deals done to date (except for & Skype) is still relatively small, the opportunity & rationale has never been better.
    GOOG, YHOO, MSFT, AMZN, EBAY, IACI, among many, many others are just a few of the public companies with cash & motivation to make acquisitions of smaller internet startups with promising technology… and we’re just getting started.
    not to mention, for those startups with a revenue model (heaven forbid) who can get to breakeven cashflow on 1 or 2 rounds of financing, there is even more opportunity for them to aim for the elusive big prize (IPO) or entertain acquisition offers.
    might still not be a likely scenario, but going forward the economics & justification for M&A deals with platform Internet companies are probably a lot more fundamentally sound than 90’s model VC/I-banker hucksters selling to retail market IPO buyers (who have no clue as to value or valuation).
    don’t like the hype behind Web 2.0? think the market is overvalued (again)? whatever your beef, get over it… now is the time to be building new companies and products. whether or not VCs can make a decent ROI may be another story, but for entrepreneurs the times are pretty good.