Seed Stage Slaughter

Startup Winter Is Coming: Beware Funding Cliffs and Falling Valuations in the Consumer Web

startup winter

“It’s harder to act in a disciplined way in summer. All around you, you see excess and nonsense, companies being bought or funded for zillions of dollars without traction.” Eric Ries, the pioneer behind the Lean Startup movement, wrote those words back in August, 2011, warning that in the cyclical startup business, “what goes up will eventually come down.”

Startupland, he explained, can only stay insulated from broader economic forces–like, say, today’s warning about a new global recession--so for long: “The LP’s that fund booms are, after all, pension, municipal, and sovereign wealth funds. Consumers need disposable income to invest in the latest products,  as do the companies who serve them and advertisers who reach them.” Read More

On The Calendar

Goooood Morning, Silicon Alley! Gary Sharma’s Picks for the Week of August 29: The AARRR!! Edition


This is a guest post from Gary Sharma (aka “The Guy with the Red Tie”), founder of GarysGuide and mentor at ER Accelerator. You can reach him at gary [at]

So, it was a busy week. Steve Jobs (who loves black turtlenecks almost as much as I love red ties) resigned. Twenty-five thousand New Yorkers checked into Earthquakepocalypse (and lost some respect with Californians in the process). And Hurricane Irene gave us a few gusts of wind, a few drops of water and a lot of @ElBloombito. But nothing is more important than the upcoming SXSW 2012 Panel Picker deadline (September 2). See, where I come from, we look out for our own. So I’ve put together a list of panels representing our local New York startuppers. Go show some love and vote for them and email me if you want your panel to be added to the list.

And now, here’s whats going on in your neck of the woods this week … Read More

Fresh Capital

Tout Raises $350 K. from Dave McClure, Eric Ries, Esther Dyson and More; Still Has Foot in NYC

Mr. Kader.

Betabeat first met Tout’s Tawheed Kader–TK, as he’s known–at South By Southwest, where he was pitching an app that takes some of the pain out of repetitive emails. He already had paid subscribers and we heard glowing reviews from people who were using it. But apparently we weren’t the most important contact Mr. Kader made at the festival. He met Dave McClure over dinner and vodka. “The funny thing is, I ended up pitching Tout to just about everyone on that table except for Dave,” Mr. Kader says.

“The only real exchange the two of us had was when Dave stared at my vodka martini with 16 olives (because that’s just how I roll), and asked ‘Hey TK…. howʼs that drink treating you?’ Needless to say, Dave and I connected soon after, and before I knew it, not only was he investing in Tout, but he also convinced me to move out to California for the summer to join the 500 Startups Accelerator program.” Read More

Alley vs. Valley

“I’ll Be Back,” Says New York Founder Who Ditched Alley for Valley

Sam Rosen, Speakergram

New York expatriate Sam Rosen works on the top floor of the tallest building in Mountain View, California, surrounded by Silicon Valley landmarks. Facebook is up the road, Apple is in the other direction, and the Googleplex is to the east. It’s been more than a month since foul-mouthed superinvestor Dave McClure—a member of the Valley “PayPal mafia”–invited Mr. Rosen to join his incubator, 500Startups, after a serendipitous meeting at General Assembly.

The Valley is beautiful, Mr. Rosen says, and he’s had more exposure and mentoring for his start-up than he ever could back home. But he doesn’t plan to stay. The founder plans to defy convention by moving back to New York after incubating his start-up on the West Coast, and he’s starting to think he might be part of a trend. Read More