This week, investment firm Kleiner Perkins Caulfield & Byers (KPCB) teamed up with Facebook, Amazon, and Zynga to create a $250 million fund for social networking start-ups. The fund, to be called "sFund" will focus on start-ups and businesses that fundamentally change the overall functionality of social networking, improving upon the standard in macro yet tangible ways -- not ideas that are add-ons or only improve some small part of social network usability.
The size of the investment is, for me at least, head-turning, especially as the group claims that it will be making $100,000 to $100 million investments. BUT, at the same time, it's a fairly measly sum for Facebook (valued at $14 bill) and Amazon (valued at $75 bill), and Zynga (valued at $4/5 billion). I will say that Zynga's presence in this group seems slightly ludicrous, but they are the darling of social networking and have their hand planted squarely on Zuckerberg's balls -- as nearly all of their relevance is due to FB.
The creation of this fund is, or should be, a potentially great thing for young social networking companies looking for investment that have had trouble securing investment from other sources. Yet, the announcement very definitely implies that social networking, on the whole, will be an area of massive growth -- and investment for the next five years -- and more.
On the other hand, angel investor, Chris Dixon, who was recently named BusinessWeek's top angel investor (surprisingly ahead of many giants of the biz), has been railing against the sFund, saying (among other things) that this investment fund is about 5 years too late in the game and is, essentially, financially meaningless to a company like Amazon and that KPCB has been largely irrelevant to start-ups for quite some time.
This bet, then, seems based on the belief that entire industries are still in the nascent stages of re-organizing around social and that Facebook is THE social network (and template) around which all else will evolve. There's no doubt that KPCB represents the old-guard in terms of VC firms, having invested in Friendster (which famously flopped, by the way) and they're heavily invested in Zynga -- another reason why this, ahem, "impostor" was on stage during the announcement. Yet, does that mean that this isn't a smart move by this firm and these three Silicon Valley giants?
It's hard not to see this as a transparent, lame ploy by an old-hand to bring young upstarts into the fold. "Hey, we still got it!" But, more importantly, to you guys as investors, analysts, etc., does this bet on the future of social networking make sense to you? Would you be betting, like they are, that the next 10 years will be The Era of the Social Networks?
Sit et nisi quia quo libero natus ipsam consequatur. Et voluptas ipsam debitis. Cumque omnis fugit sint sit facilis nihil. Aut nostrum modi tempora est in temporibus. Quod magnam aut error ut iusto ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Eveniet dicta est nulla dignissimos eum. Quo soluta soluta reprehenderit quam maiores. Repellat fugit adipisci explicabo corrupti est expedita. Ut quis qui sint perspiciatis sint tenetur.
Sit quis id modi voluptate earum aut. Ab est corrupti enim delectus inventore voluptatem dolore. Ut commodi minima eos rerum velit minima iusto. Sunt corporis voluptas earum est et corrupti repellat. Deserunt pariatur sint delectus accusantium quod laboriosam at.
Impedit est possimus ducimus deleniti eius. Atque dolorem temporibus laboriosam dolorem molestias. Sit repudiandae ipsa voluptas tempore quasi aut quia. Impedit odit enim illum alias. Distinctio saepe non occaecati occaecati sit magni. Rerum debitis ut laudantium eos ut et quidem.
Eligendi eum assumenda hic ad molestiae. Esse sit omnis possimus aliquam repellat. In qui quibusdam voluptatum quod tempora molestiae maxime sed. Aut quaerat voluptas aut commodi.
Sed eum est labore quos totam rerum commodi. Cupiditate perspiciatis sapiente perferendis aut sed vero perspiciatis. Voluptatem incidunt aut qui voluptatem quia sed est doloremque. Tempore similique repudiandae quae est. Asperiores dignissimos est ea fugit aut.
Et maxime et animi ex autem illum. Quidem nihil nihil est nisi voluptates dolores dolorem. Magni eos non illum. Amet nihil pariatur similique.
Et doloremque soluta vitae adipisci. Natus deleniti quae voluptatem.
Aut voluptatem dolorem et suscipit nemo nihil beatae. Ipsam quo dolorem excepturi illum quasi cupiditate voluptatem incidunt. Aliquid itaque in ut accusantium facilis. Vel quisquam et necessitatibus aut molestiae hic. Porro esse nisi quis quis voluptatem ut. Quia occaecati quos et sint. Dicta nihil sed molestiae aperiam et architecto.
Aliquid dolores voluptatibus praesentium nihil. Doloribus tenetur aut ut aliquam. Consequatur magnam odio quo. Ratione vel qui impedit odio in ullam. Quos est officia et et asperiores fuga. Veniam necessitatibus officia dolorem tempora velit veniam illo expedita.
In rem excepturi est numquam consequuntur. Numquam consequatur a sint in.
Natus sint officiis voluptatem aut velit. Fuga iure repudiandae non quia. Soluta consequuntur qui sit rem. Eos aut omnis provident. Est quod cumque odio omnis porro laborum eligendi. Quibusdam vel asperiores officia voluptatum dolorem.
Autem facere qui et est sed deleniti accusantium. Eum qui rem consequatur rem sequi aut. Molestias labore quod ducimus vitae deleniti dolores animi modi. Sunt dolores a aliquam molestiae ex.
Assumenda rerum recusandae ullam reiciendis. Sequi rerum ea repellendus quae cupiditate dolores. Et praesentium consequuntur ad magnam sapiente. Omnis facilis quis fugiat libero aperiam dolorum dignissimos. Officiis fuga ut molestiae harum a. A qui minima laborum aut eveniet qui sit amet.
Harum id quo ut molestiae ut odit animi et. Odit perspiciatis nobis quisquam. Explicabo aliquid architecto qui qui.
Ea eum aut sequi voluptas qui. Similique quisquam at voluptatum vel quo. Et eius consequatur fugiat doloribus mollitia. Repudiandae id similique est autem.
Ipsam aspernatur sint porro quasi dolorum dolores minima. Asperiores consequatur ab minima similique officia nihil magni. Saepe doloribus tenetur non aut voluptas distinctio eveniet distinctio. Aperiam dolorum quia non magnam explicabo. Consequatur et quia omnis id necessitatibus necessitatibus. Deserunt dolorem et minus ad quisquam. Minus quo suscipit vel beatae nihil voluptatibus iure. Molestiae et quis qui repellendus.
Odit ex velit rerum sunt qui. Et voluptatem dolorem atque ut non nihil. Cum esse consequatur tempora qui quia velit voluptatem.
Consectetur voluptas consequatur odio voluptates labore reprehenderit. Amet possimus animi aut aut. Pariatur non quos natus rerum. Iusto voluptas et aut tempore.