I'm a huge fan of Listia. It is really impressive how they have turned giving away free stuff into a real business. Listia seems to really understand giving away badges and coins.
There is no such thing as a "free". And even though people aren't paying cash for these things, they're still having to earn money (listia credits) one-level removed from cash.
Having said that, these marketplaces make sense. It'd also be great if they offer even more interesting data to understand just how far consumers' irrationality goes. Understanding that alone makes this a valuable business in my mind.
In general the big investments are "safer" since they're in later stage companies. For instance I'm pretty sure Zynga will IPO, Listia's a long shot right now.
On the other hand, I'm pretty sure they won't make 1000x on Zynga. If Listia IPOs they might do better than that.
Usually people talk about ROI in terms of percentage, but that does not mean much. 3x return on a $50M investment is much better than a 100x return on a $0.5M investment, but in terms of percentage, the latter soudns nicer.
I'd rather the latter though. 100x return on $.5m is $50m. I only need to hit three of those to equal the larger return and I've got 100 shots to do it with the same amount of capital.
I'm confused by how the percentage doesn't sound as nice. It's about risk vs. reward, raw monetary return doesn't really give you that. Raw profit completely ignores the risk the investor put in initially. I'd rather have the 100x return since I risked a lot less to get get it.
I think there are more risks on the 1M dollar level. If a company raises north of 25M (in our industry) this is likely to be a C round at which point they are likely to have proven a market and a solid income.
