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That same old VC song again?

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It might be because I just watched August last night but this sounds like a very familiar and scary story. In TechCruch yesterday, Erick Schonfeld, interviewed Institutional Venture Partner’s Todd Chaffee about their joint $35M investment in Twitter. After some banter about the high growth rates and ubiquity of Twitter, Schonfeld gets to the meat of the conversation:

Sounds good, but how will it make money? Chaffee is not so worried about that just yet:

I love that here is this cry for revenue generation out of a company not even two years old. Relax, it is coming.

Anybody else hear that pin drop?

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Addition to my earlier post: This comment on the IVP investment in Twitter from today’s peHUB newsletter:

A lot has been made about how IVP and Benchmark bought in at a valuation of between $230m and $250m for a company without a dime in profit. Not nearly enough has been made of the fact that Twitter accepted that valuation, despite having previously been offered around $500m to be acquired by Facebook.

When’s the last time you heard of a venture deal in which the valuation was just half of what the company could get via a trade sale? Nope, I can’t think of one either.

Lots of strange choices and comments coming out of the Twitter ranks. I’m watching this one very closely.

Author Richard Banfield

As CEO, Richard leads Fresh Tilled Soil’s strategic vision. He’s a mentor at TechStars and BluePrintHealth, an advisor and lecturer at the Boston Startup School, and serves on the executive committees of TEDxBoston, the AdClub’s Edge Conference, and Boston Regional Entrepreneurship Week.

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