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Anti-Web 2.0 Financing Strategy – Ning Goes Big to the Well for $44m on HUGE Valuation July 10, 2007

Posted by John in Technology.
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My first reaction to the Ning financing was that oh my God we are in a raging bubble.  $170m pre money valuation.  I wonder what their revenue model is and will be. Well maybe not – it’s the Anti-Web 2.0 financing market heating up.

It is market validation that there is a big pot of money sitting on the table in key sectors. We are clearly in an ‘arms race’ funding market- meaning raise as much as you can to outwit, outlast, outplay the competition. This is clearly an anti-web 2.0 strategy on how to compete in the market that is raise as much as you can at the highest valuation and wait for the IPO market to bloom. In the meantime take all the oxygen out of the sector with a huge bankroll of working capital. This is counter to the Web 2.0 financing strategies being implemented today which is to raise as little as possible with the only liquidity option of getting bought. Ning is clearly going big. I applaud them for that. IThis should be a wake up call for Silicon Valley VCs who have been struggling with how invest and compete in the big game of high stakes tech poker – compete with Google, Microsoft, Yahoo, Amazon, eBay, Fox …etc. Meanwhile Jason Calacannis totally disses Jeremy Liew who is a venture capitalist at Lightspeed. Jeremy just recently wrote a post on why VCs are so sheepish on investing in the current market. Jeremy’s post is something that I’d expect from an analyst or a McKinsey consultant not a VC.

My congrats to Marc and Gina – bold move!  btw: I agree with Jason you can’t go out of business with money in the bank.  Just don’t buy any ping pong tables and high end expresso machines. 

I heard that a big part of the pre money valuation was the awesome video that PodTech’s Robert Scoble did with Ning. :-)

Here is a video that PodTech did with Gina the CEO. Note in the video below Gina’s hair flip at the beginning was an awesome addition by Robert’s editor Rocky

[podtech content=http://media1.podtech.net/media/2007/02/PID_010362/Podtech_NING_demo.flv&postURL=http://www.podtech.net/home/2239/build-your-own-social-space-with-ning-version-2 &totalTime=751000&breadcrumb=ab5ac044e6d54e8ba3647842dcb964f3]

Here is an indepth interview where PodTech talks with Marc Andreessen (yeah, the Marc who started Netscape) and co-founder Gina Bianchini, about a whole raft of things from what this new release enables users and developers to do to trends these two are seeing on the Internet.

[podtech content=http://media1.podtech.net/media/2007/02/PID_010361/Podtech_NING_interview.flv&postURL=http://www.podtech.net/home/2238/social-networking-with-ning-version-20 &totalTime=2011000&breadcrumb=4ce9e7581b644bcfb57ffb370e37ae20]

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Comments»

1. T. Bailey - July 10, 2007

Wow, she’s pretty hot. What’s her background?

2. Bubble? Ning! Bubble? Ning! Bubble? Ning! Bubble? Ning! « Scobleizer - July 10, 2007

[…] Ning! Bubble? Ning! Bubble? Ning! Bubble? Ning! John Furrier theorizes that getting on the Scoble Show is worth some […]

3. Jeremiah Owyang - July 10, 2007

I’m concerned about this too. Ning has 60 competitors, I’ve got the master list here:

http://www.web-strategist.com/blog/2007/02/12/list-of-white-label-social-networking-platforms/

4. jeremyliew - July 11, 2007

Hi John,

I think you may not have read my post the way I intended. I wasn’t saying that VC are unwilling to invest in the current climate at all. I’ve actually made five investments in the last 18 months myself.

Instead, the post says that there are risk for entrepreneurs in raising money at both too high and too low a valuation, and those risks are different.

We do agree on one thing though – congrats to Marc and Gina!

Cheers

J


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