In Silicon Valley, Investors Are Jockeying Like It's 1999

[mahatmakanejeeves]

In Silicon Valley, Investors Are Jockeying Like It's 1999

Technology, April 19, 2011
By MONICA LANGLEY

MENLO PARK, Calif.—Travis Kalanick is the founder of a start-up that lets people order up a car service from a cellphone. Recently, the 34-year-old found himself in the driver's seat.
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That is just one scene in the latest gold rush to sweep Silicon Valley, where prospectors are now fighting over buzzy start-ups and companies are getting their pick of deep-pocketed backers. The momentum is driving a wave of deal envy and trash talking—complete with power plays, personal feuds and turf wars among Wall Street bankers, billionaire speculators and venture-capital veterans.

"Suddenly everyone wants to invest in Silicon Valley," says Mr. Gurley. "It's game-on all the time."
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This time, it's different, because....

Rather than wait for the IPO stage to make money, Wall Street bankers are now piling in. Goldman Sachs Group Inc. scored a coup in January, when its funding deal with Facebook set the private firm's valuation at $50 billion. A month later, J.P. Morgan Chase & Co. launched its Digital Growth Fund to invest exclusively in the high-tech sector.

To some investors, the mood is reminiscent of 1995, when the initial public offering of Netscape set off the dot-com craze, leading to a technology bubble. That bubble popped in 2000, littering the tech field with failed companies and red ink.

Others believe today's boom is more sustainable. "There are a bunch of rich people and firms subsidizing tech entrepreneurs, but this time the entrepreneurs are better," says David Lee, managing partner of SV Angel, which provides seed money for tech start-ups. "These companies have millions of engaged users or actual profits. It's not just sloppy money coming to the table."

What's the worst that could happen?

[virgogal]

1. The rich get richer,and then there's me.

[marmar]

2. Those who don't learn from history..........