Shakespeare’s The Winter’s Tale

Shakespeare’s The Winter’s Tale

Good morning, All,

The quote is a stage direction from Shakespeare’s The Winter’s Tale.

You know it’s a quiet week when one of the ‘top’ stories is that Elon Musk Promises Tesla Owners Better Placed Cup Holders, Maybe. And that something’s slightly amok when two Tesla owners take out a full-page ad in the Palo Alto Daily News, the cup holders being one of the suggestions for improvement. At least we’re focused on the big stuff.

This weekend is Labor Day and traditionally, investors unplug for the month of August. Usually ain’t nothing going on but the rent. Every week, AlleyWatch compiles the New York funding that happens that week, and this past week, there were seven. Nothing too outrageous. Slow and steady. Nothing like Secret, which launched under a year ago and raised $25 million last month (total raise to $36.3 million). We covered that anonym-ish app (Anonymous sharing app ‘Secret’ isn’t so anonymous after all) not too long ago.

We understand that companies like this are an acquisition target, and we also know that the first bubble happened when inexperienced – ok, dumb – money stepped into the fray and decided to become overnight billionaires by throwing too much money at too much inexperience, when they themselves were too inexperienced. Not an optimal scenario. That’s not the case presently, but again, we’re seeing insane valuations going on – Secret’s valuation is now north of $100 million – and they’ll no doubt be acquired, by Facebook, given their latest iteration. And we just use them by way of example. They’re certainly not the exception.

The rapid adaption we’re seeing in Web 2.0 is also due to the fact that there are more devices in the hands of more people, globally, and the exponential uptick in connectivity since the Web 1.0 bubble. There’s also the emergence of the social web. Brad Feld was right: we can do more, faster. But what’s the endgame? And with much more of the planet now connected, have we or will we soon hit a saturation point?

Still, red can be the New Black for just so long.

We’re not going to prognosticate about market corrections, but is a lot of what we’re seeing companies, or add-ons? Insanely-valued features? It does seem to us that, unless they do turn these features into real businesses, the exit strategy is acquisition. But if you’ve been paying attention, there have been quite a few quiet acquisitions lately, where the deal went through right before the money ran out. Even ‘soft landings’ will get harder, as time goes on. And so it begins. An exit, hopefully not followed by a bear market. Onward and forward.

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