Investing Or Marketing? The Real Reason Lightspeed Invested In Ning At A Crazy Valuation
A lot of readers were incredulous over last week’s news that Ning raised another $15 million in venture capital from Lightspeed Venture Partners at a $750 million valuation. That comes despite the fact that Ning traffic appears to be flatlining, and revenue to date is likely very small.
A typical comment to that post: “What an ASTOUNDING way to waste money.” Others pointed out that venture capitalists typically invest hoping to at least have a chance at a 10x return - and in Ning’s case, it seems unlikely that the company will be worth the necessary $7.5 billion any time soon. So, why’d they invest?
Marketing.
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