In the technology land of milk and honey, the money is starting to flow and it's going to continue. I met with a successful venture capitalist this week and her comment to me was, "Get ready for the sub $30MM aquisitions. There's a lot of them coming in the next six months."
Milk apparently just got bought by Google. Posterous just got bought by Twitter. Hipster (who?) just got bought by AOL. Loopt got bought by Green Dot (a bit more than $30MM). Rapportive was picked up by LinkedIn. Yobongo was just bought by Mixbook. Apple is reportedly on their way to a $1,000,000,000,000 valuation. It's that time of the year and cash flush companies are getting ready to start spending.
Or maybe it's something else. Plancast founder Jay Marcyes who should have written this post, thinks we're seeing the first signs of the valley's 'angel crunch'. "It was really easy to raise a seed round, and some later rounds for some of those companies based on growth, but in the end none of them had enough users to raise more money, or a viable business model to sustain themselves.
"Arguably, all these companies had to sell because they were deemed not viable, and so larger companies picked up the teams. I'm guessing MILK with their eight employees were coming to the end of their money also, and while they could probably go raise again, the payday was there so why not take it."
It's easy for some to remember what happened 18-months ago when Google went on an offering binge. Path was offered $120MM, Color was offered $200MM, Slide was offered and took $228MM. The wave came and went and Max Levchin took home the big prize. While you could say Path is doing better, 6-months ago they were on the brink of closing. Poor little old Color is the punchline every bad joke in the Valley. Just six months ago the acquisition air around here was dead.
But the wind is back in the Valley sails and smart entrepreneurs with buzz or reputation are collecting their paydays before the giant gamblers like Google, Facebook, and LinkedIn decide they need to walk away from the action for a while. 'Hot' companies with some mobile user traction are turning into the cutting edge young "MOBILE TEAM" at some cash flush companies like Green Dot and AOL (I love that Sam Altman's new title at Green Dot is Senior Vice President of Interactive).
So look for it to continue. Small company after small company is going to get acquired for numbers that will be life changing for entrepreneurs, but will mean little for multiple hungry investors.
