Tough call whether today’s announcement of a $2.75-million investment in ActiveRain, a real estate social network — and here I thought that was my local Starbucks, which is filled with idle real estate reps — is the best or worst venture investment in some time.
Let’s pit the arguments against one another:
Best: It’s a great bottom call in a beaten and neglected sector. They must have gotten it done for a great price, and where else can real estate go from here but up?
Worst: Real estate is in the tank and likely to stay there for some time. Venture capitalists are atrocious market timers, and this is, if anything, a sign things are going to get worse. Further, building a social network for real estate agents is like building one for residents of a rapidly southward-drifting ice floe.
I give a hat-tip to Worst, especially given that the deal was done by some real estate roll-up outfit, but I’m open to arguments. A little.