Nobody pays $200MM for nothing. It's exceedingly hard to believe google valued a small pre-funding startup at over low eight figures. While most of the time I look at tech crunch leaks and believe they're real albeit spin infused, this just doesn't pass the wtf test. Arrington has appeared to have a grudge against color in the past based on the tone of the TC coverage. I'm inclined to believe this is entirely made up.
This is why you don't want to get your news and journalism from the people who are also financing deals. Now I'm not sure when to trust them at all.
-->"It's exceedingly hard to believe google valued a small pre-funding startup at over low eight figures."
But Sequoia did when they made the $40mm investment. That's what's so odd about it.
Maybe I'm missing something, but I'd chalk it up to 2 groups with deep, deep pockets making a long shot bet because they can.
Once Sequoia invested, the acquisition was derisked for someone like Google. Then Google just needed to offer a price of some multiple of the investment ("How about 5x? Not bad for 6 months!"). Conversely, Sequoia might have hoped for a flip knowing Google was so aggressive for social startups at the time and invested accordingly. As far as I can tell, the Color leadership were blinded by their own genius and these early "signals" of success and they screwed up their acquisition, launch, and thus far all meaningful execution.
This is why you don't want to get your news and journalism from the people who are also financing deals. Now I'm not sure when to trust them at all.