The risks of betting on Silicon Valley millionaire

In search of the next Facebook or Twitter, investment funds to support projects that do not always come to fruition, the experience of color, the firm raised $ 41 millionwithout a user platform

What if you arm a millionaire party and nobody shows up? A new company called Color knows what it feels like.In March, Color filed its application for sharing photos on mobile phones and revealed that he had obtained $ 41 million from investors before the application had only one user. Despite the wealth of the company, the application had a hard landing, attracting few users and many complaints if they tried it."It would make sense but could not understand how it works," wrote a critic in the Apple Apps store.Since then, color has become a red flag for investors, entrepreneurs and analysts fear that there is a bubble when you bet on new firms. They say this case shows that venture capitalists are desperate to invest in the next Facebook or LinkedIn, are throwing money blindly to new firms that have shown they can create something useful, much less a business that can give good returns on investment.Color, who says he is improving, implementation is just one of the new firms that have the commentators to speak of excess bubbling in Silicon Valley. The Melt intends to sell roasted soup, people can call from their phones. He earned about 15 million dollars from Sequoia Capital, who also invested in Color.Airbnb that helps people to rent rooms in their homes, is seeking venture capital to be valued at 1000 million. Scoopon, a kind of Groupon, the renowned company coupons online United States, earned 80 million dollars, Juice in the City, a Groupon for mothers, met 6 million and SCVNGR, which launched a Groupon for gamers on line, got 15 million. These could of course prove successful businesses.The concern, according to investors, are the prices.They say they have paid two to three times more for their shares in new ventures in the past year. According to the National Venture Capital, venture capitalists invested 5.9 billion dollars in the first three months of the year, up 14 percent over the same period last year, but invested in 51 companies less, indicating that are putting more money in fewer companies."The great success stories, Facebook, Zynga and Twitter, are taking to invest in ideas written on napkins, because no one wants to miss the next important thing," said Eric Lefkofsky founder Lightbank Groupon which also manages a investment fund based in Chicago with a chest of 100 million dollars.