New study on companies worth $100M shows how much of a lie the Web 2.0 fad was

  • There were only 472 companies they could find worth more than $100 million. I know, that sounds like a lot. But it’s really not. There are thousands of companies started every year, and the companies in this group were funded as early as 1998.
  • What’s more: They took a huge amount of cash to get to this point. In aggregate $40 billion has gone into funding these 472 companies. The median amount was $75.8 million per company and the average was $84.7 million. Now a lot of these companies are worth well over $100 million. But on average that’s not exactly a stunning return on investment.
  • Let’s look at that 20 percent in the consumer space. Out of some 80 companies, 34 of them were in the ecommerce space. Again, companies with a model for making money. Out of every company valued at north of $100 million since 1998, roughly 50 are building a business off of advertising. That’s astoundingly low, and kicks the grab-eyeballs-and-figure-it-out-later ethos right in the teeth.

I don’t agree with the “Fad” term, but perhaps not transformational in opportunities for new businesses.

New study on companies worth $100M shows how much of a lie the Web 2.0 fad was


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