Frothy Start-Up Bubble Forming?

The New York Times’ Dealbook blog recently explored the possibility of a funding bubble forming in the start-up community: “The chief evidence, according to industry experts and analysts, is the way venture capitalists and established companies are clamoring to give money to young companies, including those with only a shred of an idea.  They are piling into me-too start-ups that imitate popular Web companies that already received financing.”

Whether it’s the “herd mentality” or the movement towards smaller investments made possible by the “constantly falling cost of computing power,” the idea of investors chasing hot young companies to the point of creating “froth” is a welcome theme in light of the doom and gloom of recent few years, but hopefully, it is not also an indication that another bubble is forming.

This post on Venture Capital and Company Financings was authored by Founders Workbench.

 
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