Did you guys know this? We did not know this. Apparently under Business Insider’s “Contributors” program, bloggers like Eric Barker of Barking Up The Wrong Tree (and Wired) can post directly to the site without interacting with anyone from BI. Or used to be able to, rather. This morning, Business Insider sent contributors an email canceling the self-submit program.
IP Uh Oh
Groupon, Groupon, Groupon: Everyone’s talking about the original daily deals company in the leadup to their public debut on the markets. Everyone has a theory about what their company is and isn’t; what their future can be and can’t. And Business Insider—ever so often derided for their cut-and-paste journalism—did something late last night with Groupon that they sometimes tend to do: published a sprawling, sensational, and sourced piece of reporting that covers entire swaths of narratives both primary and otherwise on a hot subject. Meet “INSIDE GROUPON: The Truth About The World’s Most Controversial Company.“
It doesn’t contain any groundbreaking revelations on the company. It’s not going to open them up to further points of scrutiny or single-handedly change the fate of Groupon’s IPO.
But it does offer some great insight from the inside and it is, admittedly, an excellent read. Here are our favorite parts:
CHEESE AND CRACKERS. Startup godfather Paul Graham was in town this week to promote Y Combinator, the accelerater program that remains the gold standard despite the fact that it does not have its own TV show. Living in New York makes his upper lip sweat, he shared, indicating a YC branch in the city is not in the cards. Entrepreneurs were salivating over the chance to meet the jolly and gracious Mr. Graham–”never seen so many dudes in a line” as someone on Twttr, we can’t remember who, tweeted. But Mr. Graham is not as beloved when it comes to the investor community. A notoriously fierce advocate of founder power, Mr. Graham pushes for extremely favorable investment terms for YC companies–namely in the form of uncapped notes, whereby the stake in the seed round converts to a proportionate amount of stock in the next round. “Angels and super-angels tend not to like uncapped notes,” Mr. Graham has written. “They have no idea how much of the company they’re buying. If the company does well and the valuation of the next round is high, they may end up with only a sliver of it.”
The main problem with this, one investor told Betabeat, is that Mr. Graham takes a straight six percent stake in YC companies even as he waxes righteous when those companies go out to raise. Entrepreneurs defer to Mr. Graham’s advice, this source said, even when there’s another investor they’d like to work with. “He’s protecting those two blockbusters,” this source said, referring to the relatively small number of mega-breakout YC startups such as Airbnb and Heroku.
It’s fine by some investors if Mr. Graham wants his companies to talk a big game, our source said–personally, this source plans to clean up by investing in YC companies later when they “have to do a down round” after the inevitable failure to meet their investors’ artificially inflated expectations.
Business Insider announced earlier this week that it had raised a fresh $7 million in venture funding from the likes of IVP and RRE. The site earned investor’s capital by showing impressive growth in terms of both unique visitors and pageviews, even booking a small profit. But a pair of posts from late last night questioned the methods by which the site achieves this enviable traffic.
Dan Primack broke the news today that another seed stage fund is poised to enter into the New York’s teeming tech scene. The fund, which has reportedly raised around $23 million, is called Trigger Media Group. It will be run by Andy Russell, a co-founding partner of Bob Pittman’s VC and PE firm Pilot Group LLC.
Mr. Pittman, of course is the former president of AOL and the founder of MTV. According to Crunchbase, Pilot Group likes “to buy undervalued companies, fix them, and resell them.” Pilot Group is an investor in Zynga, betaworks, and our friends over at Silicon Alley Insider.
Trigger will focus on the digital media space, which means it should be wading through plenty of potential local investments.
Eat Your Own Dogfood
Not only is Silicon Alley booming again, but the IPO market is back in swing, meaning billions of web dollars are flowing through Wall Street.
Maybe that’s the reason some of New York’s top tech reporters have left their posts recently.
It was a fun week on the internet, wasn’t it guys? We were so giggly over New Work City’s fake decks that we almost neglected our rumor trafficking! So we cast a wide net with this week’s shameless rumor soliciting, and came back with a wide range of live, squirming items from all over the start-up sea. Enjoy:
Adam Neary’s tell-all blog post about Profitably’s exhausting quest for funding made a big splash this week in the normally hypersensitive climate of the New York start-up scene. Founders and VCs have been muttering, speculating to Betabeat that the post was unwisely frank, especially in its discussion of the institutional New York Angels. Will our hero suffer a backlash?
Zach Greenberger, the New York developer behind the fastest-growing Facebook application in January, Profile Banner, was recently the victim of a Hong Kong-based Facebook app syndicate.