John Battelle is moderating a panel of financial guys. (Yes, they’re all guys.) It’s titled “So is this a bubble yet?” Starting with the Google IPO.
William Janeway of Warburg Pincus: Google was making lots of money, they had to go public to create liquidity for stakeholders, and because they’d reached the point where legally they had enough owners that they had to start reporting anyway. That’s different from the situation in which VCs are basically arbitraging companies, trying to sell them off to the greater fool. As happened during the bubble. I doubt that anyone in this room will be active professionally when the next true bubble comes along.
Safa Rashtchy of Piper Jaffray: Today, only 25% of the use of the internet is for consumer content, 75% is as a utility — for communication, essentially.
Janeway: We funded enormous productive waste. Trial and error. How many startups were funded in order at the stsatrt of Web 2.0 we could have Amazon, Ebay, Google, Yahoo? There will be a lot of smart people productizing smart ideas that will be acquired.
Janeway: One of the things we like about this environment is the number of scarred veterans who survived the bubble and are actually building businesses today. Theyu’re expecting it’ll be a 5-7 year time horizon. If we do that, build a real business, generate positive cash flow, we’ll be rewarded. That’s what the Valley requires.
Lanny Baker of Smith Barney: The overall market cap of internet sector is smaller than at the peak of the bubble. Companies are generating more cash. The jokesters running the scam companies have probably been weeded out. It’s a safer pool to swim in.
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